UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2015

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35397

RENEWABLE ENERGY GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	26-4785427
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
416 South Bell Avenue Ames, Iowa	50010
(Address of principal executive offices)	(Zip code)

(515) 239-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer  x
Non-accelerated filer  ¨	Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO   x

As of April 30, 2015, the registrant had 43,935,566 shares of Common Stock outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL INFORMATION

RENEWABLE ENERGY GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)

	March 31, 2015			December 31, 2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	213,545		$	63,516
Marketable securities	3,080			16,770
Accounts receivable, net (includes amounts owed by related parties of $0 and $36, respectively)	51,025			294,669
Inventories	120,485			97,508
Prepaid expenses and other assets	39,524			43,135
Restricted cash	—			12,845
Total current assets	427,659			528,443
Property, plant and equipment, net	496,355			493,196
Goodwill	191,477			188,275
Intangible assets, net	28,669			28,837
Investments	10,059			9,736
Other assets	18,906			19,586
Restricted cash	104,815			104,815
TOTAL ASSETS	$	1,277,940		$	1,372,888
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Revolving lines of credit	$	1,302		$	16,679
Current maturities of long-term debt	5,681			5,746
Accounts payable (includes amounts owed to related parties of $914 and $1,101, respectively)	180,497			202,821
Accrued expenses and other liabilities	20,971			28,486
Deferred income taxes	14,280			14,899
Deferred revenue	15,134			16,680
Total current liabilities	237,865			285,311
Unfavorable lease obligation	18,713			19,170
Deferred income taxes	9,788			6,905
Contingent consideration for acquisitions	32,236			30,091
Long-term debt	247,030			247,183
Other liabilities	4,154			5,566
Total liabilities	549,786			594,226
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock ($.0001 par value; 300,000,000 shares authorized; 43,935,566 and 44,422,881 shares outstanding, respectively)	4			4
Common stock—additional paid-in-capital	454,601			453,109
Retained earnings	282,976			321,083
Accumulated other comprehensive loss	(4,643		)	(11		)
Treasury stock (1,110,431 and 585,150 shares outstanding, respectively)	(9,412		)	(4,412		)
Total equity attributable to the Company's shareholders	723,526			769,773
Non-controlling interest	4,628			8,889
Total equity	728,154			778,662
TOTAL LIABILITIES AND EQUITY	$	1,277,940		$	1,372,888

See notes to condensed consolidated financial statements.

1

RENEWABLE ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)

	Three months ended
	March 31, 2015			March 31, 2014
REVENUES:
Biomass-based diesel sales	$	221,026		$	209,122
Biomass-based diesel government incentives	9,788			9,890
	230,814			219,012
Services	104			28
	230,918			219,040
COSTS OF GOODS SOLD:
Biomass-based diesel	242,510			200,305
Biomass-based diesel—related parties	4,542			7,146
Services	61			25
	247,113			207,476
GROSS PROFIT (LOSS)	(16,195		)	11,564
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	16,675			11,654
RESEARCH AND DEVELOPMENT EXPENSE	3,860			1,873
LOSS FROM OPERATIONS	(36,730		)	(1,963		)
OTHER INCOME (EXPENSE), NET:
Change in fair value of contingent consideration	(293		)	—
Other income, net	565			48
Interest expense	(2,743		)	(551		)
	(2,471		)	(503		)
LOSS BEFORE INCOME TAXES	(39,201		)	(2,466		)
INCOME TAX BENEFIT	897			107
NET LOSS	(38,304		)	(2,359		)
LESS—NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST	(197		)	—
NET LOSS ATTRIBUTABLE TO THE COMPANY	(38,107		)	(2,359		)
PLUS—GAIN ON REDEMPTION OF PREFERRED STOCK	—			378
LESS—EFFECT OF CHANGES TO PREFERRED STOCK	—			(40		)
NET LOSS ATTRIBUTABLE TO THE COMPANY’S COMMON STOCKHOLDERS	$	(38,107	)	$	(2,021	)
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
BASIC	$	(0.86	)	$	(0.05	)
DILUTED	$	(0.86	)	$	(0.06	)
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
BASIC	44,362,637			38,290,404
DILUTED	44,362,637			38,557,441

See notes to condensed consolidated financial statements.

2

RENEWABLE ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands)

	Three months ended
	March 31, 2015			March 31, 2014
Net loss	$	(38,304	)	$	(2,359	)
Unrealized gains (losses) on marketable securities, net of taxes of $0 and $0, respectively	9			(52		)
Foreign currency translation adjustments	(4,641		)	—
Other comprehensive loss	(4,632		)	(52		)
Comprehensive loss	$	(42,936	)	$	(2,411	)

See notes to condensed consolidated financial statements.

3

RENEWABLE ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND EQUITY

(unaudited)

(in thousands except share amounts)

						Company Stockholders’ Equity
	Redeemable Preferred Stock Shares		Redeemable Preferred Stock			Common Stock Shares		Common Stock		Common Stock - Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Noncontrolling Interest			Total
BALANCE, January 1, 2014	143,313		$	3,963		36,506,221		$	4	$	359,818	$	238,134		$	—		$	(3,886	)	$	—		$	594,070
Issuance of common stock	—		—			49,662		—		582		—			—			—			—			582
Conversion of Series B Preferred Stock to common stock	(816	)	(23		)	1,634		—		23		—			—			—			—			23
Preferred stock redemption	(142,497	)	(3,940		)	—		—		—		378			—			—			—			378
Issuance of common stock in acquisition	—		—			2,230,559		—		26,254		—			—			—			—			26,254
Stock compensation expense	—		—			—		—		1,235		—			—			—			—			1,235
Series B Preferred Stock dividends paid	—		—			—		—		—		(40		)	—			—			—			(40		)
Net change in unrealized losses on marketable securities	—		—			—		—		—		—			(52		)	—			—			(52		)
Net loss	—		—			—		—		—		(2,359		)	—			—			—			(2,359		)
BALANCE, March 31, 2014	—		$	—		38,788,076		$	4	$	387,912	$	236,113		$	(52	)	$	(3,886	)	$	—		$	620,091
BALANCE, January 1, 2015	—		$	—		44,422,881		$	4	$	453,109	$	321,083		$	(11	)	$	(4,412	)	$	8,889		$	778,662
Issuance of common stock	—		—			37,966		—		412		—			—			—			—			412
Treasury stock purchases	—		—			(525,281	)	—		—		—			—			(5,000		)	—			(5,000		)
Purchase of additional interest	—		—			—		—		—		—			—			—			(4,064		)	(4,064		)
Stock compensation expense	—		—			—		—		1,080		—			—			—			—			1,080
Net change in unrealized gains (losses) on marketable securities	—		—			—		—		—		—			9			—			—			9
Foreign currency translation adjustment	—		—			—		—		—		—			(4,641		)	—			—			(4,641		)
Net loss	—		—			—		—		—		(38,107		)	—			—			(197		)	(38,304		)
BALANCE, March 31, 2015	—		$	—		43,935,566		$	4	$	454,601	$	282,976		$	(4,643	)	$	(9,412	)	$	4,628		$	728,154

See notes to condensed consolidated financial statements.

4

RENEWABLE ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three months ended
	March 31, 2015			March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(38,304	)	$	(2,359	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation expense	5,613			3,004
Amortization expense of assets and liabilities, net	113			(121		)
Accretion of convertible note discount	1,158			—
Change in fair value of contingent consideration	293			—
Provision for doubtful accounts	(816		)	(150		)
Stock compensation expense	1,080			1,235
Deferred tax expense (benefit)	(938		)	(387		)
Other operating activities	199			—
Changes in asset and liabilities, net of effects from acquisitions:
Accounts receivable, net	242,572			52,213
Inventories	(24,123		)	(8,261		)
Prepaid expenses and other assets	4,508			(3,734		)
Accounts payable	(20,482		)	(7,383		)
Accrued expenses and other liabilities	(5,305		)	(5,578		)
Deferred revenue	(1,546		)	(3,659		)
Net cash flows provided by operating activities	164,022			24,820
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for marketable securities	—			(59,975		)
Maturities of marketable securities	13,733			—
Change in restricted cash	12,845			—
Cash paid for purchase of property, plant and equipment	(12,178		)	(12,773		)
Cash paid for acquisitions and additional interests, net of cash acquired	(4,064		)	(15,275		)
Other investing activities	—			112
Net cash flows provided by (used in) investing activities	10,336			(87,911		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments on line of credit	(15,325		)	(8,549		)
Cash paid on debt	(1,317		)	(1,006		)
Cash paid for debt issuance costs	(317		)	(118		)
Cash paid for equity issuance costs	—			(108		)
Cash paid for treasury stock	(5,000		)	(529		)
Cash paid for preferred stock dividends	—			(40		)
Cash paid for redemption of preferred stock	—			(3,562		)
Cash paid for contingent consideration settlement	(1,052		)	—
Net cash flows used in financing activities	(23,011		)	(13,912		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	151,347			(77,003		)
CASH AND CASH EQUIVALENTS, Beginning of period	63,516			153,227
Effect of exchange rate changes on cash	(1,318		)	—
CASH AND CASH EQUIVALENTS, End of period	$	213,545		$	76,224

(continued)

5

RENEWABLE ENERGY GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three months ended
	March 31, 2015		March 31, 2014
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash paid/(received) for income taxes	$	—	$	40
Cash paid for interest	$	715	$	539
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Amounts included in period-end accounts payable for:
Purchases of property, plant and equipment	$	3,511	$	4,579
Debt issuance cost	$	28	$	63
Incentive stock liability for raw material supply agreement	$	70	$	101
Equity issuance costs			$	321
Issuance of common stock for acquisitions			$	26,254
Contingent consideration for acquisitions			$	17,050
Gain on redemption of preferred stock			$	378

(concluded)

See notes to condensed consolidated financial statements.

6

RENEWABLE ENERGY GROUP, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The three Months Ended March 31, 2015 and 2014

(unaudited)

(in thousands, except share and per share amounts)

NOTE 1 — BASIS OF PRESENTATION AND NATURE OF THE BUSINESS

The condensed consolidated financial statements have been prepared by Renewable Energy Group, Inc. and its subsidiaries (the Company), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations and cash flows at the dates and for the periods presented. It is suggested that these interim financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

As of March 31, 2015, the Company operates a network of nine operating biomass-based diesel production facilities with aggregate nameplate production capacity of 332 million gallons per year, or mmgy. A number of these plants are “multi-feedstock capable” which allows them to use a broad range of lower cost feedstocks, such as inedible corn oil, used cooking oil and inedible animal fats in addition to vegetable oils, such as soybean oil and canola oil.

The Company expanded its business to Europe by acquiring a majority interest in Petrotec AG (Petrotec) in December 2014. Petrotec is a fully-integrated company that produces biodiesel at its two biorefineries in Emden and Oeding, Germany to sell to the European market.

The biomass-based diesel industry and the Company’s business have benefited from the continuation of certain federal and state incentives. The federal biodiesel tax credit expired on December 31, 2014 and it is uncertain whether it will be reinstated. This revocation along with other amendments of any one or more of those laws, could adversely affect the financial results of the Company.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company has disclosed a summary of the Company's significant accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2014. There have been no material changes from the policies previously disclosed other than those noted below.

Restricted Cash

At March 31, 2015, current restricted cash was $0. At December 31, 2014, current restricted cash was $12,845, which was held in certificates of deposit as pledges for a letter of credit to support a subsidiary's trade activities and the Company's tender offer to acquire the remaining interest at Petrotec. Non-current restricted cash consists of $101,315 as of March 31, 2015 and December 31, 2014, respectively, which is held in a certificate of deposit and pledged to Bank of America, who issued a letter of credit on the Company's behalf to support the payments on the Company's GOZone Bonds. In addition, at March 31, 2015 and December 31, 2014, non-current restricted cash included an amount of $3,500, which is held in a certificate of deposit and pledged to Bank of America, who issued a letter of credit to support a subsidiary's trade activities. The Company classifies restricted cash between current and non-current assets based on the length of time of the restricted use.

Accounts Receivable

Accounts receivable are carried at invoiced amount less allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after reasonable collection attempts have been exhausted. At March 31, 2015, the outstanding receivable amount related to the 2014 biodiesel mixture excise tax credit reinstatement was approximately $14,722.

Goodwill

7

Goodwill is tested for impairment annually on July 31 or when impairment indicators exist. Goodwill is allocated and tested for impairment by reporting units. The analysis is based on a comparison of the carrying value of the reporting unit to its fair value, determined utilizing both a discounted cash flow methodology and a market comparable methodology. The determination of whether or not the asset has become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the Company’s reporting units. Changes in estimates of future cash flows caused by items such as unforeseen events or sustained unfavorable changes in market conditions could negatively affect the fair value of the reporting unit’s goodwill asset and result in an impairment charge. The annual impairment test determined that the fair value of the biomass-based diesel reporting unit exceeded its carrying value by approximately 7% and the services reporting unit exceeded its carrying value by approximately 66%. The Company also reviewed goodwill recorded from the acquisitions of LS9, Inc., Syntroleum Corporation and Dynamic Fuels, LLC during the annual impairment testing. There have been no impairment indicators in the first three months of 2015 that would indicate that an additional assessment needs to be performed.

Share Repurchase Programs

In February 2015, the Company's board of directors approved a share repurchase program of up to $30,000 of the Company's shares of Common Stock. Shares may be repurchased from time to time in open market transactions, privately negotiated transactions or by other means. The Company accounts for share repurchases using the cost method. Under this method, the cost of the share repurchase is recorded entirely in treasury stock, a contra equity account. During the three months ended March 31, 2015, the Company repurchased shares of Common Stock in the amount of $5,000 under this share repurchase program.

Foreign Currency Transactions and Translation

The Company’s reporting and functional currency is U.S. dollars. Monetary assets and liabilities denominated in currencies other than U.S. dollars are remeasured into their respective functional currencies at exchange rates in effect at the balance sheet date. The resulting exchange gain or loss is included in the Company’s Condensed Consolidated Statements of Operations as foreign exchange gain (loss) unless the remeasurement gain or loss relates to an intercompany transaction that is of a long-term investment nature and for which settlement is not planned or anticipated in the foreseeable future. Gains or losses arising from translation of such transactions are reported as a component of accumulated other comprehensive income (loss) in the Company’s Condensed Consolidated Balance Sheets.

The Company translates the assets and liabilities of its foreign subsidiaries from their respective functional currencies to U.S. dollars at the appropriate spot rates as of the balance sheet date. Generally, our foreign subsidiaries use the local currency as their functional currency. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) in the Company’s Condensed Consolidated Balance Sheets.

Income Taxes

The Company uses the asset and liability method to account for income taxes. Accordingly, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. Changes in tax rates are recognized directly to the income statement as they arise. Consideration is given to positive and negative evidence related to the realization of the deferred tax assets and valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized. Significant judgment is required in making this assessment.

For uncertain tax positions, the Company recognizes tax benefits that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized.

With regard to non-US subsidiaries, the Company does not have any undistributed earnings and the Company has not yet decided to indefinitely invest any future earnings outside of the U.S. 

New Accounting Standards

In February 2015, the FASB issued ASU 2015-02, which amends the consolidation requirements in ASC 810 and significantly changes the consolidation analysis required under U.S. GAAP. The guidance in the ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 with early adoption permitted. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 simplifying the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct

8

deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance in the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

NOTE 3 — ACQUISITIONS AND EQUITY TRANSACTIONS

Syntroleum Corporation/Dynamic Fuels, LLC

On June 3, 2014, REG Synthetic Fuels, a wholly-owned subsidiary of the Company included in the Biomass-based diesel segment, acquired substantially all the assets of Syntroleum, which consisted of a 50% limited liability company membership interest in Dynamic Fuels, as well as intellectual property and other assets in exchange for the issuance of $34,831, or 3,493,613 shares, of the Company's Common Stock. Dynamic Fuels owned a 75 million gallon per year nameplate capacity renewable hydrocarbon diesel biorefinery located in Geismar, Louisiana.

On June 6, 2014, REG Synthetic Fuels acquired the remaining 50% ownership interest in Dynamic Fuels from Tyson Foods in exchange for $16,447 in cash and $28,900 in contingent consideration. The Company renamed Dynamic Fuels to REG Geismar, LLC, which is included in the Biomass-based diesel segment. The Company has completed its initial accounting for this business combinations during the first quarter of 2015 as the valuation of the intangible assets, goodwill, the real and personal property, and contingent consideration has been finalized.

The fair value of the 3,493,613 shares of Common Stock issued to Syntroleum was determined on the basis of the closing market price of the Company's Common Stock at the date of acquisition.

The fair value of the Syntroleum renewable hydrocarbon diesel technology was determined using the relief from royalty method, or RFR, which reflects the savings realized by owning the intangible assets. The value under RFR method is dependent upon the following factors for an asset: royalty rate, discount rate, expected life and projected revenue.

The finalization of the purchase price allocation resulted in an increase in goodwill of $3,202 relating to higher than initially estimated net operating losses prior to the acquisition of Syntroleum and Dynamic Fuels.

The following table summarizes the amount of assets acquired and liabilities assumed at the acquisition date and at March 31, 2015 for the combined acquisition of Syntroleum and Dynamic Fuels:

	June 6, 2014			March 31, 2015
Assets (liabilities) acquired of Syntroleum and Dynamic Fuels:
Cash	$	253		$	253
Other current assets	4,666			4,666
Property, plant and equipment	121,567			121,567
Goodwill	68,196			71,398
Intangible assets	8,900			8,900
Other noncurrent assets	10,281			10,281
Other current liabilities	(1,024		)	(1,024		)
Deferred tax liabilities	(5,108		)	(8,310		)
Debt	(113,553		)	(113,553		)
Other noncurrent liabilities	(14,000		)	(14,000		)
Total	$	80,178		$	80,178

Subject to achievements related to the sale of renewable hydrocarbon diesel at the REG Geismar production facility, Tyson Foods may receive contingent consideration of up to $35,000. The Company will pay contingent consideration, if and when, the Company achieves certain sales volumes. The agreement calls for periodic payments based on pre-determined price per gallon of product sold. The probability weighted contingent payments were discounted using a risk adjusted discount rate of 5.8%. Any contingent payments will be payable in cash. As of March 31, 2015, the Company has recorded a contingent liability of $29,967, of which $6,324 has been classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets.

9

The goodwill acquired is included in the Biomass-based diesel segment, a portion of which is expected to be deductible for tax purposes.

Petrotec AG

On December 24, 2014, the Company acquired 69.08% of the outstanding common shares and voting interest of Petrotec. The results of Petrotec’s operations have been included in the consolidated financial statements since that date. The Company has not completed its initial accounting for this business combination as the valuation of the assets acquired and liabilities assumed has not been finalized.

The following table summarizes the consideration paid for Petrotec:

	December 24, 2014
Consideration at fair value for Petrotec:
Common stock	$	20,022

The fair value of the 2,070,538 shares of the Company's Common Stock issued for the acquisition was determined on the basis of the closing market price of the Company's Common Stock at the date of acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

	December 24, 2014
Assets (liabilities) acquired of Petrotec:
Cash	$	13,523
Accounts receivable	4,989
Inventory	9,470
Other current assets	3,583
Property, plant and equipment	25,026
Total identifiable assets acquired	56,591
Accounts payable	(8,171		)
Accrued expenses and other liabilities	(2,151		)
Debt	(16,192		)
Non-current liabilities	(1,462		)
Total liabilities assumed	(27,976		)
Net identifiable assets acquired	28,615
Goodwill	369
Non-controlling interest	(8,962		)
Net assets acquired	$	20,022

The $369 of goodwill was assigned to the Biomass-based diesel segment, all of which is expected to be deductible for income tax purposes.

At December 31, 2014, the fair value of the 30.92% noncontrolling interest in Petrotec was estimated to be $8,962. The fair value of the noncontrolling interest was estimated using a combination of the income approach and a market approach.

The Company recognized $1,289 of acquisition related costs that were expensed in the last quarter of 2014. In addition, during the three months ended March 31, 2015, the Company acquired additional common shares of Petrotec as part of the cash tender offer. At March 31, 2015, the Company owned 84.42% of the outstanding common shares and voting interest of Petrotec.

In April 2015, Petrotec's application to de-list its shares of common stock from the Frankfurt Stock Exchange was approved. As a result, Petrotec's shares of common stock will no longer be traded on any regulated market of any stock exchange at the end of the October 8, 2015 trading day.

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NOTE 4 — MARKETABLE SECURITIES

The Company's investments in marketable securities are stated at fair value and are available-for-sale. The following table summarizes the Company's marketable securities:

	As of March 31, 2015
	Maturity	Gross Amortized Cost		Total Unrealized Gains		Total Unrealized Losses		Fair Value
Certificates of deposit	Within one year	$	3,080	$	—	$	—	$	3,080

	As of December 31, 2014
	Maturity	Gross Amortized Cost		Total Unrealized Gains		Total Unrealized Losses			Fair Value
Corporate bonds	Within one year	$	6,781	$	—	$	(6	)	$	6,775
Certificates of deposit	Within one year	10,000		—		(5		)	9,995
Total		$	16,781	$	—	$	(11	)	$	16,770

NOTE 5 — INVENTORIES

Inventories consist of the following:

	March 31, 2015		December 31, 2014
Raw materials	$	33,138	$	23,117
Work in process	2,875		2,879
Finished goods	84,472		71,512
Total	$	120,485	$	97,508

NOTE 6 — PREPAID EXPENSES AND OTHER ASSETS

Prepaid expense and other assets consist of the following:

	March 31, 2015		December 31, 2014
Commodity derivatives and related collateral, net	$	15,169	$	12,938
Prepaid expenses	5,783		7,901
Deposits	3,958		4,481
RIN inventory	7,955		10,795
Taxes receivable	1,712		2,843
Other	4,947		4,177
Total	$	39,524	$	43,135

RIN inventory values were adjusted in the amount of $3 and $1,042 at March 31, 2015 and December 31, 2014, respectively, to reflect the lower of cost or market.

Other noncurrent assets consist of the following:

	March 31, 2015		December 31, 2014
Debt issuance costs (net of accumulated amortization of $1,345 and $1,474, respectively)	$	4,825	$	5,152
Spare parts inventory	3,440		3,440
Deposits	4,370		4,370
Other	6,271		6,624
Total	$	18,906	$	19,586

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NOTE 7 — GOODWILL

The following table shows the carrying amount of goodwill by reportable segment as of December 31, 2014 and the changes in goodwill for the three months endedMarch 31, 2015:

	Biomass-based diesel		Services		Total
Balance, December 31, 2014	$	172,195	$	16,080	$	188,275
Finalization of purchase accounting	3,202		—		3,202
Balance, March 31, 2015	$	175,397	$	16,080	$	191,477

NOTE 8 — INTANGIBLE ASSETS

Intangible assets consist of the following:

	March 31, 2015
	Cost		Accumulated Amortization			Net		Weighted Average Remaining Life
Raw material supply agreement	$	5,983	$	(1,208	)	$	4,775	10.8 years
Renewable hydrocarbon diesel technology	8,300		(461		)	7,839		14.3 years
Ground lease	200		(101		)	99		6.6 years
Total amortizing intangibles	14,483		(1,770		)	12,713
In-process research and development, indefinite lives	15,956		—			15,956
Total intangible assets	$	30,439	$	(1,770	)	$	28,669

	December 31, 2014
	Cost		Accumulated Amortization			Net		Weighted Average Remaining Life
Raw material supply agreement	$	5,914	$	(1,113	)	$	4,801	11.0 years
Renewable hydrocarbon diesel technology	8,300		(323		)	7,977		14.5 years
Ground lease	200		(97		)	103		6.9 years
Total amortizing intangibles	14,414		(1,533		)	12,881
In-process research and development, indefinite lives	15,956		—			15,956
Total intangible assets	$	30,370	$	(1,533	)	$	28,837

The Company recorded intangible amortization expense of $237 and $84 for the three months ended March 31, 2015 and March 31, 2014, respectively.

The estimated intangible asset amortization expense for fiscal year 2015 through fiscal year 2020 and thereafter is as follows:

April 1, 2015 through December 31, 2015	$	769
2016	1,040
2017	1,054
2018	1,068
2019	1,083
2020	1,099
2021 and thereafter	6,600
Total	$	12,713

NOTE 9 — DEBT

The Company’s debt is as follows:

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	March 31, 2015		December 31, 2014
2.75% Convertible Senior Notes, $143,750 face amount, due in June 2019	$	122,512	$	121,354
REG Geismar GOZone bonds, secured, variable interest rate of daily LIBOR, due in October 2033	100,000		100,000
REG Danville term loan, secured, variable interest rate of LIBOR plus 5%, due in November 2015	1,213		1,513
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018	19,206		19,868
REG Mason City term loan, fixed interest rate of 5%, due in July 2019	4,346		4,566
REG Ames term loans, secured, fixed interest rates of 3.5% and 4.25%, due in January 2018 and December 2019, respectively	4,145		4,226
Other	1,289		1,402
Total debt	$	252,711	$	252,929

Revolving Lines of Credit

	March 31, 2015		December 31, 2014
Amount borrowed under revolving lines of credit	$	1,302	$	16,679
Maximum available to be borrowed under revolving line of credit	$	39,970	$	20,719

NOTE 10 — RELATED PARTY TRANSACTIONS

Summary of Related Party Balances - Condensed Consolidated Statements of Operations
	Three Months   Ended   March 31,   2015		Three Months   Ended   March 31,   2014
Cost of goods sold – Biomass-based diesel	$	4,542	$	7,146

Summary of Related Party Balances - Condensed Consolidated Balance Sheets
	As of March 31, 2015		As of December 31, 2014
Accounts receivable	$	—	$	36
Accounts payable	$	914	$	1,101

NOTE 11 — DERIVATIVE INSTRUMENTS

The Company enters into heating oil and soybean oil futures, swaps and options (commodity contract derivatives) to reduce the risk of price volatility related to anticipated purchases of feedstock raw materials and to protect gross profit margins from potentially adverse effects of price volatility on biomass-based diesel sales where prices are set at a future date. All of the Company’s commodity contract derivatives are designated as non-hedge derivatives and recorded at fair value on the Condensed Consolidated Balance Sheets. Unrealized gains and losses are recognized as a component of biomass-based diesel costs of goods sold reflected in current results of operations. As of March 31, 2015, the Company had 2,626 open commodity contracts.

The Company offsets the fair value amounts recognized for its commodity contract derivatives with cash collateral with the same counterparty under a master netting agreement. The net position is presented within prepaid and other assets in the Condensed Consolidated Balance Sheets. The following table sets forth the fair value of the Company's commodity contract

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derivatives and amounts that offset within the Condensed Consolidated Balance Sheets:

	March 31, 2015						December 31, 2014
	Assets			Liabilities			Assets			Liabilities
Gross amounts of derivatives recognized at fair value	$	6,282		$	1,296		$	14,901		$	205
Cash collateral	10,183			—			2,870			4,628
Total gross amount recognized	16,465			1,296			17,771			4,833
Gross amounts offset	(1,296		)	(1,296		)	(4,833		)	(4,833		)
Net amount reported in the condensed consolidated balance sheet	$	15,169		$	—		$	12,938		$	—

The following table sets forth the pre-tax gains (losses) included in the Condensed Consolidated Statements of Operations:

	Location of Gain (Loss) Recognized in income	Three Months   Ended   March 31,   2015			Three Months   Ended   March 31,   2014
Commodity derivatives	Cost of goods sold – Biomass-based diesel	$	(623	)	$	(694	)

NOTE 12 — FAIR VALUE MEASUREMENT

The fair value hierarchy prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Quoted prices for identical instruments in active markets.

• Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

A summary of assets (liabilities) measured at fair value is as follows:

	As of March 31, 2015
	Total			Level 1		Level 2		Level 3
Certificates of deposit	$	3,080		$	—	$	3,080	$	—
Commodity contract derivatives	$	4,986		1,933		3,053		—
Contingent consideration for LS9 acquisition	$	(8,593	)	—		—		(8,593		)
Contingent consideration for Dynamic Fuels acquisition	$	(29,967	)	—		—		(29,967		)
	$	(30,494	)	$	1,933	$	6,133	$	(38,560	)

	As of December 31, 2014
	Total			Level 1		Level 2		Level 3
Money market funds	$	302		$	302	$	—	$	—
Certificates of deposit	$	9,995		—		9,995		—
Commercial notes/bond	$	6,775		—		6,775		—
Commodity contract derivatives	$	14,696		6,885		7,811		—
Contingent consideration for LS9 acquisition	$	(8,624	)	—		—		(8,624		)
Contingent consideration of Dynamic Fuels acquisition	$	(30,695	)	—		—		(30,695		)
	$	(7,551	)	$	7,187	$	24,581	$	(39,319	)

The following is a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

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	Contingent Consideration for LS9 Acquisition			Contingent Consideration for Dynamic Fuels Acquisition
Balance at beginning of period, January 1, 2015	$	8,624		$	30,695
Change in estimates included in earnings	(31		)	324
Settlements	—			(1,052		)
Balance at end of period, March 31, 2015	$	8,593		$	29,967

	Contingent Consideration for LS9 Acquisition		Contingent Consideration for Dynamic Fuels Acquisition
Balance at beginning of period, January 1, 2014	$	—	$	—
Additions for acquisitions	17,050		—
Balance at end of period, March 31, 2014	$	17,050	$	—

The estimated fair values of the Company’s financial instruments, which are not recorded at fair value, are as follows:

	As of March 31, 2015						As of December 31, 2014
	Asset (Liability) Carrying Amount			Fair Value			Asset (Liability) Carrying Amount			Fair Value
Financial liabilities:
Debt and lines of credit	$	(254,013	)	$	(254,781	)	$	(269,608	)	$	(270,331	)

The carrying amounts reported in the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values. Money market funds are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

The Company used the following methods and assumptions to estimate fair value of its financial instruments:

Marketable securities: The fair value of marketable securities, which include certificates of deposit and commercial notes/bonds are obtained using quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices, e.g., interest rates and yield curves. The Company utilizes a pricing service to assist in obtaining fair value pricing for the majority of this investment portfolio.

Commodity derivatives: The instruments held by the Company consist primarily of futures contracts, swap agreements, purchased put options and written call options. The fair value of contracts based on quoted prices of identical assets in an active exchange-traded market is reflected in Level 1. Contract fair value that is determined based on quoted prices of similar contracts in over-the-counter markets is reflected in Level 2.

Contingent consideration for acquisitions: The fair value of the LS9 contingent consideration is determined using an expected present value technique. Expected cash flows are determined using the probability weighted-average of possible outcomes that would occur should achievement of certain milestones related to the development and commercialization of products from LS9’s technology occur. There is no observable market data available to use in valuing the contingent consideration; therefore, the Company developed its own assumptions related to the expected future delivery of product enhancements to estimate the fair value of these liabilities. An 8.0% discount rate is used to estimate the fair value of the expected payments.

The fair value of the Dynamic Fuels contingent consideration is determined using an expected present value technique. Expected cash flows are determined using the probability weighted-average of possible outcomes that would occur should the achievement of certain milestones related to the sale of renewable hydrocarbon diesel at the REG Geismar's production facility. A 5.8% discount rate is used to estimate the fair value of the expected payments.

Debt and lines of credit: The fair value of long-term debt and lines of credit was established using discounted cash flow calculations and current market rates reflecting Level 2 inputs.

NOTE 13 — NET LOSS PER SHARE

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Basic net loss per share is presented in conformity with the two-class method required for participating securities. Participating securities include, or have included, Series B Preferred Stock and restricted stock units (RSUs).

Under the two-class method, net income is reduced for distributed and undistributed dividends earned in the current period. The remaining earnings are then allocated to Common Stock and the participating securities. The Company calculates the effects of participating securities on diluted earnings per share (EPS) using both the “if-converted or treasury stock” and "two-class" methods and discloses the method which results in a more dilutive effect. The effects of Common Stock options, warrants, stock appreciation rights and convertible notes on diluted EPS are calculated using the treasury stock method unless the effects are anti-dilutive to EPS.

The following potentially dilutive weighted average securities were excluded from the calculation of diluted net loss per share attributable to common stockholders during the periods presented as the effect was anti-dilutive:

	Three Months   Ended   March 31,   2015	Three Months   Ended   March 31,   2014
Options to purchase common stock	87,026	87,026
Restricted stock units	—	567,716
Stock appreciation rights	2,123,770	1,583,670
Warrants to purchase common stock	—	17,916
Convertible notes	10,838,218	—
Total	13,049,014	2,256,328

The following table presents the calculation of diluted net loss per share:

	Three Months   Ended   March 31,   2015			Three Months   Ended   March 31,   2014
Net loss attributable to the Company’s common stockholders - Basic	$	(38,107	)	$	(2,021	)
Plus: distributed dividends to Preferred Stockholders	—			40
Plus (Less): effect of participating securities	—			(378		)
Net loss attributable to common stockholders - Dilutive	$	(38,107	)	$	(2,359	)
Shares:
Weighted-average shares used to compute basic net loss per share	44,362,637			38,290,404
Adjustment to reflect conversion of preferred stock	—			267,037
Weighted-average shares used to compute diluted net loss per share	44,362,637			38,557,441
Net loss per share attributable to common stockholders:
Diluted	$	(0.86	)	$	(0.06	)

NOTE 14 — REPORTABLE SEGMENTS

The Company reports its reportable segments based on products and services provided to customers, which include Biomass-based diesel, Services and Corporate and other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company has chosen to differentiate the reportable segments based on the products and services each segment offers.

The Biomass-based diesel segment processes waste vegetable oils, animal fats, virgin vegetable oils and other feedstocks and methanol into biomass-based diesel. The Biomass-based diesel segment also includes the Company’s purchases and resale of biomass-based diesel produced by third parties. Revenues are derived from the purchases and sales of biomass-based diesel and raw material feedstocks acquired from third parties, sales of biomass-based diesel produced under toll manufacturing arrangements with third party facilities, sales of processed biomass-based diesel from Company facilities, sales of RINs, related by-products and renewable energy government incentive payments. The Services segment offers services for managing the construction of biomass-based diesel production facilities and managing ongoing operations of internal and third party plants and collects fees related to the services provided. The Company does not allocate items that are of a non-operating nature or corporate expenses to the business segments. Intersegment revenues are reported by the Services segment, which manages the construction and operations of facilities included in the Biomass-based diesel segment. Revenues are recorded by the Services

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segment at cost. Corporate expenses consist of corporate office expenses including compensation, benefits, occupancy and other administrative costs, including management service expenses.

The following table represents the significant items by reportable segment:

	Three Months   Ended   March 31,   2015			Three Months   Ended   March 31,   2014
Net revenues:
Biomass-based diesel	$	230,814		$	219,012
Services	18,811			20,524
Intersegment revenues	(18,707		)	(20,496		)
	$	230,918		$	219,040
Income (loss) before income taxes:
Biomass-based diesel	$	(20,098	)	$	11,561
Services	43			3
Corporate and other (a)	(19,146		)	(14,030		)
	$	(39,201	)	$	(2,466	)
Depreciation and amortization expense, net:
Biomass-based diesel	$	5,208		$	2,589
Services	62			41
Corporate and other (a)	456			253
	$	5,726		$	2,883
Cash paid for purchases of property, plant and equipment:
Biomass-based diesel	$	10,490		$	12,554
Services	722			—
Corporate and other (a)	966			219
	$	12,178		$	12,773

	As of March 31, 2015		As of December 31, 2014
Assets:
Biomass-based diesel	$	916,371	$	899,211
Services	22,781		20,750
Corporate and other (b)	338,788		452,927
	$	1,277,940	$	1,372,888

(a) Corporate and other includes income/(expense) not associated with the reportable segments, such as corporate general and administrative expenses, shared service expenses, interest expense and interest income.

(b) Corporate and other includes cash and other assets not associated with the reportable segments, including investments.

Geographic Information:

The following geographic data include net sales attributed to the countries based on the location of the subsidiary making the sale and long-lived assets based on physical location. Long-lived assets represent the net book value of property, plant and equipment.

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	Three Months   Ended   March 31,   2015		Three Months   Ended   March 31,   2014
Net revenues:
United States	$	200,925	$	219,040
Foreign	29,993		—
	$	230,918	$	219,040

	As of March 31, 2015		As of December 31, 2014
Long-lived assets:
United States	$	474,397	$	468,170
Foreign	21,958		25,026
	$	496,355	$	493,196

NOTE 15 — COMMITMENTS AND CONTINGENCIES

The Company is involved in legal proceedings in the normal course of business. The Company currently believes that any ultimate liability arising out of such proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements regarding Renewable Energy Group, Inc., or “we,” “our” or “the Company” that involve risks and uncertainties such as anticipated financial performance, business prospects, technological developments, products, possible strategic initiatives and similar matters. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “predict,” “potential,” “plan,” or the negative of these terms, and similar expressions intended to identify forward-looking statements.  

These forward-looking statements include, but are not limited to, statements about facilities currently under development progressing to the construction and operational stages, including planned capital expenditures and our ability to obtain financing for such construction; existing or proposed legislation affecting the biomass-based diesel industry, including governmental incentives and tax credits; our utilization of forward contracting and hedging strategies to minimize feedstock and other input price risk; anticipated future revenue sources from our operational management and facility construction services; the expected effect of current and future environmental laws and regulations on our business and financial condition; our ability to renew existing and expired contracts at similar or more favorable terms; expected technological advances in biomass-based diesel production methods; our competitive advantage relating to input costs relative to our competitors; the market for biomass-based diesel and potential biomass-based diesel consumers; our ability to further develop our financial, managerial and other internal controls and reporting systems to accommodate future growth; expectations regarding the realization of deferred tax assets and the establishment and maintenance of tax reserves and anticipated trends; expectations regarding our expenses and sales; anticipated cash needs and estimates regarding capital requirements and needs for additional financing; and challenges in our business and the biomass-based diesel market.

These forward-looking statements are based on management’s current expectations, estimates, assumptions and projections, which are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those expected. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Risks and uncertainties include, but are not limited to, those risks discussed in Item 1A Part II in this Quarterly Report on Form 10-Q for the three months ended March 31, 2015. We encourage you to read this Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the accompanying condensed consolidated financial statements and related notes. Forward-looking statements contained in this report present management’s views only as of the date of this report. Except as required under applicable law, we do not intend to issue updates concerning any future revisions of management’s views to reflect events or circumstances occurring after the date of this report.

Overview

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We are a leading advanced biofuels producer and are expanding into the development of renewable chemicals. We have been a leader in the biomass-based diesel industry since 1996. We utilize a nationwide production, distribution and logistics system as part of an integrated value chain model to focus on converting natural fats, oils and greases into advanced biofuels and converting diverse feedstocks into renewable chemicals. We own and operate nine biomass-based diesel production facilities with aggregate nameplate production capacity of 332 million gallons per year, or mmgy, as well as one fermentation facility.

We are expanding into the production of renewable chemicals, additional advanced biofuels and other products through our January 2014 acquisition and creation of REG Life Sciences, LLC. This industrial biotechnology business is a development stage company focusing on harnessing the power of microbial fermentation to develop and produce renewable chemicals, fuels and other products.

We began selling petroleum-based heating oil and diesel fuel, which enables us to offer additional biofuel blends, while expanding our customer base. We sell heating oil and ultra-low sulfur diesel, or ULSD, at terminals throughout the northeastern U.S. as well as BioHeat® blended heating fuel at one of our existing Northeast terminal locations in February 2014. We are expanding our sales of additional biofuel blends to Midwest terminal locations and potentially in other areas across North America.

We acquired a 75 mmgy nameplate capacity renewable hydrocarbon diesel biorefinery located in Geismar, Louisiana in June 2014. Our Geismar facility had been idled by its previous owner and began operating again by us in October 2014 after our completion of certain upgrades.

We also expanded our business internationally by acquiring a majority interest in Petrotec AG, or Petrotec, in December 2014. During first quarter 2015, we acquired additional shares in Petrotec through the previously filed and closed cash tender offer. Petrotec is a fully-integrated company utilizing more than 15,000 collection points to gather used cooking oil and other waste feedstocks to produce biomass-based diesel at its two biorefineries in Emden and Oeding, Germany.  Petrotec’s nameplate production capacity is approximately 56 mmgy (185,000 metric tons or MT) per year.

For the three months ended March 31, 2015, we sold 60 million total gallons, including four million gallons that we purchased from third parties and resold, nine million international gallons and four million petroleum gallons. During 2014, we sold a total of 287 million total gallons, including 42 million gallons we purchased from third parties and resold and four million petroleum gallons.

We derive revenues from two reportable business segments: Biomass-based diesel and Services.

Biomass-based diesel Segment

Our Biomass-based diesel segment, as reported herein, includes:

• the operations of the following biomass-based diesel production facilities:

• a 12 mmgy nameplate biomass-based diesel production facility located in Ralston, Iowa;

• a 35 mmgy nameplate biomass-based diesel production facility located near Houston, Texas;

• a 45 mmgy nameplate biomass-based diesel production facility located in Danville, Illinois;

• a 30 mmgy nameplate biomass-based diesel production facility located in Newton, Iowa;

• a 60 mmgy nameplate biomass-based diesel production facility located in Seneca, Illinois;

• a 30 mmgy nameplate biomass-based diesel production facility located near Albert Lea, Minnesota;

• a 15 mmgy nameplate biomass-based diesel production facility located in New Boston, Texas;

• a 30 mmgy nameplate biomass-based diesel production facility located in Mason City, Iowa;

• a 75 mmgy nameplate renewable hydrocarbon diesel production facility located in Geismar, Louisiana, since its acquisition in June 2014;

• a 30 mmgy nameplate biomass-based diesel production facility located in Emden, Germany since its majority ownership was acquired in December 2014;

• a 26 mmgy nameplate biomass-based diesel production facility located in Oeding, Germany since its majority ownership was acquired in December 2014; and

• a demonstration scale facility located in Okeechobee, Florida since its acquisition in January 2014.

• purchases and resale of biomass-based diesel, Renewable Identification Numbers, or RINs, and raw material feedstocks acquired from third parties;

• our sales of biomass-based diesel produced under toll manufacturing arrangements with third party facilities using our feedstocks; and

• incentives received from federal and state programs for renewable fuels.

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We derive a small portion of our revenues from the sale of glycerin, free fatty acids and other co-products of the biomass-based diesel production process. In 2014 and for the three months ended March 31, 2015, our revenues from the sale of co-products were less than five percent of our total Biomass-based diesel segment revenues.

RINs are used to track compliance with RFS2 using the EPA moderated transaction system, or EMTS. RFS2 allows us to attach between zero and 2.5 RINs to any gallon of biomass-based diesel we sell. We generally attach 1.5 to 1.7 RINs when we sell a gallon of biomass-based diesel. As a result, a portion of our selling price for a gallon of biomass-based diesel is generally attributable to RFS2 compliance; however no cost is allocated to the RINs generated by our biomass-based diesel production as RINs are a form of government incentive and not a result of the physical attributes of the biomass-based diesel production. In addition, RINs, once obtained through the production and sales of gallons of biomass-based diesel, may be separated by the acquirer and sold separately. From time to time, we may obtain these RINs from third parties for resale, and the value of these RINs is reflected in “Prepaid expenses and other assets” on our Condensed Consolidated Balance Sheets. At each balance sheet date, this RIN inventory is valued at the lower of cost or market and resulting adjustments are reflected in our cost of goods sold for the period. The cost of RINs obtained from third parties is determined using the average cost method. Because we do not allocate costs to RINs generated by our biomass-based diesel production, fluctuations in the value of our RIN inventory represent fluctuations in the value of RINs we have obtained from third parties.

Services Segment

Our Services segment includes:

• biomass-based diesel facility management and operational services, whereby we provide day-to-day management and operational services to biomass-based diesel production facilities; and

• construction management services, whereby we act as the construction management and general contractor for the construction of biomass-based diesel production facilities.

During recent years, we have utilized our construction management expertise internally to upgrade our facilities, such as Albert Lea, New Boston, Mason City and Newton. We anticipate external revenues derived from construction management services will be minimal in future periods. Demand for our construction management and facility management and operational services depend on capital spending by potential customers and existing customers, which is directly affected by trends in the biomass-based diesel industry. We have not received any orders or provided services to outside parties for new facility construction services since 2009.

Factors Influencing Our Results of Operations

The principal factors affecting our operations are the market prices for biomass-based diesel and the feedstocks used to produce biomass-based diesel, as well as governmental programs designed to create incentives or requirements for the production and use of biomass-based diesel.

Governmental programs favoring biomass-based diesel production and use

Biomass-based diesel has historically been more expensive than petroleum-based diesel, excluding biomass-based diesel incentives and credits. The biomass-based diesel industry’s growth has largely been the result of federal and state programs that require or incentivize biomass-based diesel, which allows biomass-based diesel to compete with petroleum-based diesel on price.

On July 1, 2010, RFS2 was implemented, stipulating volume requirements for the amount of biomass-based diesel and other advanced biofuels that must be utilized in the United States each year. Under RFS2, Obligated Parties, including petroleum refiners and fuel importers, must show compliance with these standards. Currently, biodiesel and renewable hydrocarbon diesel production meets two categories of an Obligated Party’s annual renewable fuel required volume obligation, or RVO—biomass-based diesel and undifferentiated advanced biofuel. The RFS2 program required the domestic use of one billion gallons of biomass-based diesel in 2012 and 1.28 billion gallons in 2013. As of this filing, the EPA has not finalized the 2014 or the 2015 RVO. In November 2013, the EPA proposed that the 2014 and 2015 biomass-based diesel RVO be 1.28 billion gallons for each of those years and a reduced Advanced Biofuel RVO of 2.20 billion gallons rather than the original EISA volume of 3.75 for 2014, a proposal whereby the EPA has issued a "notification of delay in issuing standards." In April 2015, the EPA announced a consent decree to release the 2014 and 2015 RFS2 target RVO and finalize the 2014 and 2015 targets by November 30, 2015. In addition, within this announcement the EPA indicated they would release the biomass-based diesel RVO for 2016 and 2017 during June 2015.

Volumes of biomass-based diesel produced increased from 2010 to 2013. From 2013 through 2014 volumes of biomass-based diesel were flat. Notwithstanding the lack of a finalized 2014 RVO, according to EMTS data, 1.75 billion gallons of

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biomass-based diesel was produced and imported into the U.S. in 2014. In the first three months of 2015, according to EMTS data, 0.31 billion gallons of biomass-based diesel was produced and imported into the U.S., compared to 0.33 billions in the first three months of 2014.

The Biodiesel Mixture Excise Tax Credit, or BTC, provided a $1.00 refundable tax credit per gallon of 100% pure biomass-based diesel, or B100, to the first blender of biomass-based diesel with petroleum-based diesel fuel. The BTC became effective January 1, 2005 and then lapsed January 1, 2010 before being reinstated retroactively on December 17, 2010. The BTC again expired as of December 31, 2011 and on January 2, 2013, it was again reinstated, retroactively for 2012 and through December 31, 2013. The BTC expired again on December 31, 2013 and was retroactively reinstated for 2014 on December 19, 2014. Unlike prior years, Congress did not grant a two year reinstatement, but rather only reinstated the BTC for 2014. Accordingly, the BTC expired again on December 31, 2014. We recognized a net benefit from the BTC of $78.8 million in 2014 and expect to recognize a net benefit of $16.5 million in 2015 relating to 2014 activity. It is uncertain whether the BTC will be reinstated and if reinstated, whether or not it would be reinstated retroactively. The expiration of the BTC along with any amendments that may be made if the BTC is reinstated or a similar credit is enacted, could adversely affect our financial results in the future.

Biomass-based diesel and feedstock price fluctuations

Our operating results generally reflect the relationship between the price of biomass-based diesel, including credits and incentives, like RINs and the BTC and the price of feedstocks used to produce biomass-based diesel.

Biomass-based diesel is a low carbon, renewable alternative to petroleum-based diesel fuel and is primarily sold to the end user after it has been blended with petroleum-based diesel fuel. Biomass-based diesel prices have historically been heavily influenced by petroleum-based diesel fuel prices. Accordingly, biomass-based diesel prices have generally been impacted by the same factors that affect petroleum prices, such as crude oil supply and demand balance, worldwide economic conditions, wars and other political events, OPEC production quotas, changes in refining capacity and natural disasters.

Regulatory and legislative factors also influence the price of biomass-based diesel. Biomass-based diesel RIN pricing has had a significant impact on our biomass-based diesel pricing. During 2014, the value of RINs, as reported by OPIS, have contributed to the average B100 spot price of a gallon of biomass-based diesel, as reported by The Jacobsen, from a low of $0.64 per gallon, or 19%, in January to a high of $1.15, or 34%, per gallon in December. There was a significant decline in RIN prices during the second and third quarters of 2014, but the prices went back up in the fourth quarter and finished the year at their peak. During the first three months of 2015, the value of RINs, as reported by OPIS, have contributed to the average B100 spot price of a gallon of biomass-based diesel, as reported by the Jacobsen, from a low of $0.94 or 30% in January to a high of $1.31 or 45% also in January.

The changes in the value of RINs during the first three months of 2015 resulted in a $2.8 million write-down to lower of cost or market on RIN inventory acquired from third party transactions that occurred throughout the period. See “Note 6 – Prepaid Expenses and Other Assets” to our Condensed Consolidated Financial Statements. We enter into forward contracts to sell RINs and we use risk management position limits to manage RIN exposure. Because of EPA rules limiting the amount of assigned RINs we can hold at any one time, the value of these assigned RINs held in inventory does not have a material effect on margins from period to period.

During 2014, feedstock expense accounted for 80% of our production cost, while methanol and chemical catalysts expense accounted for 5% and 3% of our costs of goods sold, respectively.

Feedstocks for biomass-based diesel production, such as inedible corn oil, used cooking oil, inedible animal fat and soybean oil are commodities and market prices for them will be affected by a wide range of factors unrelated to the price of biomass-based diesel and petroleum-based diesel fuels. The following table outlines some of the factors influencing supply and price for each feedstock:

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Feedstock	Factors Influencing Supply and Price
Inedible Corn Oil	Demand for inedible corn oil from renewable fuel and other markets
	Ethanol production
	Export demand
	Extraction system yield
	Implementation of inedible corn oil separation systems into existing and new ethanol facilities
Used Cooking Oil	Biomass-based diesel demand
	Export demand
	Population
	Number of restaurants in the vicinity of collection facilities and terminals which is dependent on population density
	Cooking methods and eating habits, which can be impacted by the economy
Inedible Animal Fat	Export demand
	Number of slaughter kills in the United States
	Demand for inedible animal fat from other markets
Soybean Oil	Export demand
	Weather conditions
	Soybean meal demand
	Farmer planting decisions
	Government policies and subsidies
	Crop disease
	Biomass-based diesel demand

During 2014, 85% of our feedstocks were comprised of inedible corn oil, used cooking oil and inedible animal fats with the remainder coming from refined vegetable oil.

The graph below illustrates the spread between the cost of producing one gallon of biodiesel made from soybean oil to the cost of producing one gallon of biodiesel made from a lower cost feedstock from December 2011 to March 31, 2015. The results were derived using assumed conversion factors for the yield of each feedstock and subtracting the cost of producing one gallon of biodiesel made from each respective lower cost feedstock from the cost of producing one gallon of biodiesel made from soybean oil.

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(1) Soybean oil (crude) prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.7 pounds per gallons).   

(2) Used cooking oil prices are based on the monthly average of the daily low sales price of Missouri River yellow grease as reported by The Jacobsen (based on 8.5 pounds per gallon).

(3) Inedible corn oil prices are reported as the monthly average of the daily distillers’ corn oil market values delivered to Illinois as reported by The Jacobsen (based on 8.2 pounds per gallon).

(4) Choice white grease prices are based on the monthly average of the daily low prices of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).

Our results of operations generally will benefit when the spread between biodiesel prices and feedstock prices widens and will be harmed when this spread narrows. The following graph shows feedstock cost data of choice white grease and soybean oil on a per gallon basis compared to the per gallon sale price data for biodiesel, and the spread between the two, from December 2011 to March 31, 2015.

(1) Biodiesel prices are based on the monthly average of the midpoint of the high and low prices of B100 (Upper Midwest) as reported by The Jacobsen.

(2) Soybean oil (crude) prices are based on the monthly average of the daily closing sale price of the nearby soybean oil contract as reported by CBOT (based on 7.7 pounds per gallon).

(3) Choice white grease prices are based on the monthly average of the daily low price of Missouri River choice white grease as reported by The Jacobsen (based on 8.0 pounds per gallon).

(4) Spread between biodiesel price and choice white grease price.

(5) Spread between biodiesel price and soybean oil (crude) price.

Energy prices continued to decline in first quarter 2015 mainly driven by a decrease in crude oil prices. Feedstock prices traded in a sideways-pattern in first quarter 2015. A record corn and soybean harvest coupled with lower energy prices helped push feedstock prices lower in the last-half of 2014. US cattle slaughter numbers continued at a historically low rate as a result of the two year drought in the southern plains. During first quarter 2015, hog slaughter numbers continued to increase year over year.

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Risk Management

The profitability of the biomass-based diesel production business largely depends on the spread between prices for feedstocks and biomass-based diesel, including RINs, each of which is subject to fluctuations due to market factors and each of which is not significantly correlated. Adverse price movements for these commodities directly affect our operating results. We attempt to protect operating margins by entering into risk management contracts that mitigate price volatility of our feedstocks, such as inedible corn oil, used cooking oil, inedible animal fat, soybean oil and energy prices. We create offsetting positions by using a combination of forward fixed-price physical purchases and sales contracts on feedstock and biomass-based diesel, including risk management futures contracts, swaps and options primarily on heating oil and soybean oil; however, the extent to which we engage in risk management activities varies substantially from time to time, and from feedstock to feedstock, depending on market conditions and other factors. In making risk management decisions, we utilize research conducted by outside firms to provide additional market information.

Inedible corn oil, used cooking oil, inedible animal fat and soybean oil are the primary feedstocks we used to produce biodiesel in 2014 and the first three months of 2015. We utilize several varieties of inedible animal fat, such as beef tallow, choice white grease and poultry fat derived from livestock. There is no established futures market for these lower cost feedstocks. The purchase prices for lower cost feedstocks are generally set on a negotiated flat price basis or spread to a prevailing market price reported by the USDA price sheet or The Jacobsen. Our limited ability to risk manage against changing inedible corn oil, used cooking oil and inedible animal fat prices have involved entering into futures contracts, swaps or options on other commodity products, such as soybean oil or heating oil. However, these products do not always experience the same price movements as lower cost feedstocks, making risk management for these feedstocks challenging. We manage feedstock supply risks related to biomass-based diesel production in a number of ways, including, where available, through long-term supply contracts. The purchase price for soybean oil under these contracts may be indexed to prevailing CBOT soybean oil market prices with a negotiated market basis. We utilize futures contracts, swaps and options to risk manage, or lock in, the cost of portions of our future feedstock requirements generally for varying periods up to one year.

Our ability to mitigate our risk of falling biomass-based diesel prices is limited. We have entered into forward contracts to supply biomass-based diesel. However, pricing under these forward sales contracts generally has been indexed to prevailing market prices, as fixed price contracts for long periods on acceptable terms have generally not been available. There is no established market for biomass-based diesel futures in the United States. Our efforts to hedge against falling biomass-based diesel prices generally involve entering into futures contracts, swaps and options on other commodity products, such as diesel fuel and heating oil. However, price movements on these products are not highly correlated to price movements of biomass-based diesel.

We generate 1.5 to 1.7 biomass-based diesel RINs for each gallon of biomass-based diesel we produce and sell. We also obtain RINs from third party transactions which we hold for resale. There is no established futures market for RINs, which severely limits the ability to risk manage the price of RINs. We enter into forward contracts to sell RINs and we use risk management position limits to manage RIN exposure.

As a result of our strategy, we frequently have gains or losses on derivative financial instruments that are conversely offset by losses or gains on forward fixed-price physical contracts on feedstocks and biomass-based diesel or inventories. Gains and losses on derivative financial instruments are recognized each period in operating results while corresponding gains and losses on physical contracts are generally not recognized until quantities are delivered or title transfers. Our results of operations are impacted when there is a period mismatch of recognized gains or losses associated with the change in fair value of derivative instruments used for risk management purposes at the end of the reporting period but the purchase or sale of feedstocks or biomass-based diesel has not yet occurred resulting in the offsetting gain or loss will be recognized in a later accounting period.

We recorded risk management losses of $0.6 million and $0.7 million from our derivative financial instrument activity for the three months ended March 31, 2015 and March 31, 2014, respectively. Changes in the value of these futures, swaps or options instruments are recognized in current income or loss. Over the first three months of 2015, we had risk management losses of approximately $0.01 per gallon sold. Over the last three years, risk management gains have represented income of approximately $0.07 per gallon sold.

Seasonality

Our operating results are influenced by seasonal fluctuations in the demand for biodiesel. Our sales tend to decrease during the winter season due to blending concentrations being reduced to adjust for performance during colder weather. Colder seasonal temperatures can cause the higher cloud point biodiesel we make from inedible animal fats to become cloudy and eventually gel at a higher temperature than petroleum-based diesel or lower cloud point biodiesel made from soybean oil, canola oil or inedible corn oil. Such gelling can lead to plugged fuel filters and other fuel handling and performance problems for customers and suppliers. Reduced demand in the winter for our higher cloud point biodiesel can result in excess supply of

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such higher cloud point biodiesel and lower prices for such biodiesel. In addition, most of our production facilities are located in colder Midwestern states in proximity to feedstock origination and our costs of shipping increases as more biodiesel is transported to warmer climate states during winter.

RIN prices may also be subject to seasonal fluctuations. A RIN is dated for the calendar year in which it is generated. Since only 20% of an Obligated Party's annual RVO can be satisfied by prior year RINs, most RINs must come from biofuel produced or imported during the RVO year. As a result, RIN prices can be expected to decrease as the calendar year progresses if the RIN market is oversupplied compared to that year's RVO and increase if it is undersupplied.

Industry capacity and production

Our operating results are influenced by our industry’s capacity and production, including in relation to RFS2 consumption requirements. Consumption of biomass-based diesel in 2011, 2012 and 2013 was in excess of a continued expanding RFS2 volume requirements. As reported by EMTS, biomass-based diesel RIN generation was 1.78 billion gallons in 2013 when the RVO for biomass-based diesel was 1.28 billion. In November 2013 the EPA proposed the 2014 and 2015 biomass-based diesel RVO at 1.28 billion gallons for each year. The EPA later issued a "notification of delay in issuing standards", effectively withdrawing the proposal. In April 2015, the EPA announced a consent decree to release the 2014 and 2015 RFS2 target RVO and finalize the 2014 and 2015 targets by November 30, 2015. In addition, within this announcement, the EPA indicated they would release the biomass-based diesel RVO for 2016 and 2017 during June 2015. As of the date of this filing, the RVO for 2014 and 2015 had not been proposed nor finalized. Notwithstanding this, we expect RFS2 to continue to create demand for biomass-based diesel. Biomass-based diesel consumption, as reported by EMTS, was flat when comparing 2013 gallons produced and imported to the 1.75 billion gallons produced and imported during 2014. In the first three months of 2015, according to EMTS data, 0.31 billion gallons of biomass-based diesel was produced and imported into the U.S., compared to 0.33 billions in the first three months of 2014.

During 2013 and 2014, the amount of imported gallons qualifying under RFS2 has increased. Imported gallons will likely make up a growing percentage of the RVO, as the EPA has approved a plan to allow Argentinian biodiesel made from soybean oil to qualify for RINs generation. Under RFS2, Obligated Parties are entitled to satisfy up to 20% of their annual requirement for with prior year RINs. We saw a decline in RIN prices in the first three quarters of 2014 as production rates exceeded the then proposed, yet delayed issuance and not yet finalized, RVO target. During 2015, according to OPIS, RINs prices began the year at $0.92 per RIN and closed March lower at $0.81 per RIN.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, equities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for judgments we make about the carrying values of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from the estimates.

We have disclosed under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2014 the critical accounting policies which materially affect our financial statements. There have been no material changes from the critical accounting policies previously disclosed other than those noted below. You should carefully consider the critical accounting policies set forth in our Annual Report on Form 10-K along with information described below.

Goodwill asset valuation. While goodwill is not amortized, it is subject to periodic reviews for impairment. As required by ASC Topic 350, Intangibles-Goodwill and Other, we review the carrying value of goodwill for impairment annually on July 31 or when we believe impairment indicators exist. Goodwill is allocated and reviewed for impairment by reporting units. The analysis is based on a comparison of the carrying value of the reporting unit to its fair value, determined utilizing a discounted cash flow, or DCF, methodology and consideration of a market approach. Additionally, we review the carrying value of goodwill whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. Changes in estimates of future cash flows caused by items such as unforeseen events or sustained unfavorable changes in market conditions could negatively affect the fair value of the reporting unit’s goodwill asset and result in an impairment charge.

We engaged an independent external valuation specialist to provide assistance in measuring the fair value of our Biomass-based diesel and Services reporting units using an income approach. The income approach uses a discounted cash flow, or DCF, analysis based on cash flow estimates prepared by us in addition to comparing other selected public guideline company information. The selected DCF method is an invested capital method. In performing the services reporting unit goodwill

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impairment analysis, cash flows generated from services provided to third parties and to the biodiesel reporting unit were used to determine the reporting unit’s fair value.

The annual impairment tests as of July 31, 2014 determined that the fair value at the Biomass-based diesel reporting unit exceeded its value by approximately 7% and the Services reporting unit exceeded its value by approximately 66%. We also reviewed goodwill recorded from the acquisitions of LS9, Inc., Syntroleum Corporation and Dynamic Fuels, LLC at July 31, 2014 and determined no impairment was needed. No impairment of goodwill was recorded at March 31, 2015 or during 2014. There can be no assurances that future circumstances and/or conditions will not change, which could result in an impairment of goodwill. Such circumstances and/or conditions could include, but are not limited to, further decline in the price of our Common Stock, deterioration in our financial condition or results of operations, and/or adverse changes in the fair value of our assets and liabilities. Management continues to monitor circumstances and conditions for events that could result in an impairment of our goodwill.

Results of Operations

Three months ended March 31, 2015 and 2014

Set forth below is a summary of certain financial information (dollars in thousands and gallons in millions except for per gallon data) for the periods indicated:

	Three Months Ended March 31,
	2015			2014
Gallons sold	59.9			47.3
Average B100 price per gallon	$	3.08		$	3.54
Revenues	230,918			219,040
Cost of goods sold	247,113			207,476
Gross profit	(16,195		)	11,564
Selling, general and administrative expenses	16,675			11,654
Research and development expense	3,860			1,873
Loss from operations	(36,730		)	(1,963		)
Other income (expenses), net	(2,471		)	(503		)
Income tax benefit	897			107
Net loss	(38,304		)	(2,359		)
Less: Net loss attributable to noncontrolling interests	(197		)	—
Net loss attributable to the Company	(38,107		)	(2,359		)
Gain on redemption of preferred stock	—			378
Distributed and undistributed dividends to preferred stockholders	—			(40		)
Net loss attributable to the Company's common stockholders	$	(38,107	)	$	(2,021	)

Revenues. Our total revenues increased $11.9 million, or 5%, to $230.9 million for the three months ended March 31, 2015 from $219.0 million for the three months ended March 31, 2014. This increase was primarily due to the increase in the gallons sold during the quarter resulting from our expansion into renewable hydrocarbon diesel and international sales. The increase was offset by decreasing biodiesel prices as a result of the drop in crude oil prices, declining market demand from the uncertainty around the RVO coupled with low seasonal demand, and the reductions in biomass-based diesel government incentives resulting from the expiration of the biodiesel mixture excise credit, or BTC at December 31, 2014. As of this filing, the EPA has not finalized the 2014 or the 2015 RVO.

Biomass-based diesel revenues including government incentives increased $11.8 million, or 5%, to $230.8 million for the three months ended March 31, 2015 from $219.0 million for the three months ended March 31, 2014. Gallons sold increased by 12.6 million, or 27%, to 59.9 million gallons for the three months ended March 31, 2015 compared to 47.3 million gallons for the three months ended March 31, 2014. Our average B100 sales price per gallon decreased $0.46, or 13%, to $3.08 for the three months ended March 31, 2015, compared to $3.54 for the three months ended March 31, 2014. The decrease in average sales price contributed to a $21.6 million decrease in revenues for the three months ended March 31, 2015, when

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applied to the number of gallons sold during the same period of 2014. The increase in gallons sold for the three months ended March 31, 2015 accounted for revenues increase of $44.6 million for the three months ended March 31, 2015 using pricing for the same period of 2014. Sales of separated RIN inventory were $32.5 million for the three months ended March 31, 2015 and $30.0 million for the three months ended March 31, 2014.

Costs of goods sold. Our costs of goods sold increased $39.6 million, or 19%, to $247.1 million for the three months ended March 31, 2015 from $207.5 million for the three months ended March 31, 2014. Costs of goods sold as a percentage of revenues were 107% for the three months ended March 31, 2015 and 95% for the three months ended March 31, 2014. The increase in cost of goods sold as a percentage of revenues during the three months ended March 31, 2015 was primarily due to the expiration of the BTC at December 31, 2014 and lower biodiesel prices as compared to 2014, as the sharp decline in energy prices continued in first quarter 2015 driven mostly by crude oil price declines.

Biomass-based diesel costs of goods sold increased in the three months ended March 31, 2015 due to a 27% increase in gallons sold that offset a slight decrease in average feedstock prices. Average lower cost feedstocks prices were $0.29 per pound for the three months ended March 31, 2015, and $0.32 per pound for the three months ended March 31, 2014. Soybean oil costs were $0.33 per pound for the three months ended March 31, 2015 and $0.40 per pound for the three months ended March 31, 2014. We recorded risk management losses of $0.6 million from our derivative financial instrument activity for the three months ended March 31, 2015, compared to risk management losses of $0.7 million for the three months ended March 31, 2014. Costs of goods sold for separated RIN inventory sales were $40.2 million for the three months ended March 31, 2015 and $19.7 million for the three months ended March 31, 2014.

Selling, general and administrative expenses. Our selling, general and administrative, or SG&A, expenses were $16.7 million, or 7% of total revenue, for the three months ended March 31, 2015 and $11.7 million, or 5.3% of total revenue, for the three months ended March 31, 2014. The increase of $5.0 million, or 43%, for the three months ended March 31, 2015 was primarily due to an increase of $2.4 million from international expansion, $1.3 million in employee related expenses as headcount increased from prior year acquisitions supporting growth, $1.2 million increase in legal and professional expenses largely associated with international expansion.

Research and development expense. Our research and development expenses were $3.9 million for the three months ended March 31, 2015, compared to $1.9 million for the three months ended March 31, 2014. The increase in research and development expenses was mainly attributable to increased research and development activities to bring products to market and drive growth, and having the full quarter of activity in 2015 for REG Life Sciences compared to a partial quarter in 2014 due to timing of the acquisition. REG Life Sciences primarily focuses on microbial fermentation to develop and produce renewable chemicals, fuels and other products.

Other income (expense), net. Other expense was $2.5 million for the three months end March 31, 2015, and $0.5 million for the three months ended March 31, 2014. Other income (expense) is primarily comprised of change in value of contingent consideration, interest expense, interest income and the other non-operating items.

Income tax benefit (expense). We recognized an income tax benefit of $0.9 million and $0.1 million for the three months ended March 31, 2015 and March 31, 2014, respectively. Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter.  Our effective tax rate differs from the statutory tax rate primarily due to the fact that the company has a valuation allowance on its deferred tax assets.

Adjusted EBITDA

We use earnings before interest, taxes, depreciation and amortization, adjusted for certain additional items, identified in the table below, or Adjusted EBITDA, as a supplemental performance measure. We present Adjusted EBITDA because we believe it assists investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA to evaluate, assess and benchmark our financial performance on a consistent and a comparable basis and as a factor in determining incentive compensation for our executives.

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The following table provides our Adjusted EBITDA for the periods presented, as well as a reconciliation to net income:

(In thousands)	Three Months   Ended   March 31,   2015			Three Months   Ended   March 31,   2014
Net loss	$	(38,304	)	$	(2,359	)
Adjustments:
Income tax (benefit) expense	(897		)	(107		)
Interest expense	2,743			551
Other (income) expense, net	(565		)	(48		)
Change in fair value of contingent liability	293			—
Straight-line lease expense	(158		)	(163		)
Depreciation	5,613			3,004
Amortization	(219		)	(185		)
Other	197			—
Biodiesel tax credit (1)	—			12,778
Non-cash stock compensation	1,080			1,235
Adjusted EBITDA	$	(30,217	)	$	14,706

(1) On December 19, 2014, the Tax Increase Prevention Act of 2014 was signed into law, which reinstated a set of tax extender items including the retroactive reinstatement of the federal biodiesel mixture excise tax credit for 2014 and expired on December 31, 2014. The retroactive credit for 2014 resulted in a net benefit to us that was recognized in the fourth quarter of 2014, however because this credit relates to the full year operating performance and results, we allocated the credit based upon gallons sold among each of the quarters of 2014.

Adjusted EBITDA is a supplemental performance measure that is not required by, or presented in accordance with, generally accepted accounting principles, or GAAP. Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as alternatives to cash flows from operating activities or a measure of our liquidity or profitability. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for any of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures for capital assets or the impact of certain cash clauses that we consider not to be an indication of our ongoing operations;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital requirements;

• Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;

• stock-based compensation expense is an important element of our long term incentive compensation program, although we have excluded it as an expense when evaluating our operating performance; and

• other companies, including other companies in the industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.

Liquidity and Capital Resources

Sources of liquidity. At March 31, 2015, the total of our cash and cash equivalents and our marketable securities was $216.6 million compared to $80.3 million at December 31, 2014. At March 31, 2015, we had total assets of $1,277.9 million compared to $1,372.9 million at December 31, 2014. At March 31, 2015, we had term debt of $252.7 million, compared to term debt of $252.9 million at December 31, 2014. Over $101.3 million of our term debt is fully cash collateralized with a certificate of deposit with Bank of America. There were $1.3 million outstanding borrowings on our revolving lines of credit at March 31, 2015 compared to $16.7 million at December 31, 2014. Availability under the Wells Fargo revolver was $40.0 million as of March 31, 2015. We were in compliance with all restrictive financial covenants associated with the borrowings as of March 31, 2015.

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Our term debt (in thousands) are as follows:

	March 31, 2015		December 31, 2014
2.75% Convertible Senior Notes, $143,750 face amount, due in June 2019	$	122,512	$	121,354
REG Geismar GOZone bonds, secured, variable interest rate of daily LIBOR, due in October 2033	100,000		100,000
REG Danville term loan, secured, variable interest rate of LIBOR plus 5%, due in November 2015	1,213		1,513
REG Newton term loan, secured, variable interest rate of LIBOR plus 4%, due in December 2018	19,206		19,868
REG Mason City term loan, fixed interest rate of 5%, due in July 2019	4,346		4,566
REG Ames term loans, secured, fixed interest rates of 3.5% and 4.25%, due in January 2018 and December 2019, respectively	4,145		4,226
Other	1,289		1,402
Total debt	$	252,711	$	252,929

We have disclosed under the heading “Liquidity and Capital Resources” in our Annual Report on Form 10-K for the year ended December 31, 2014 the capital resources which materially affect our financial statements. There have been no material changes from the capital resources previous disclosed other than those noted below. You should carefully consider the liquidity and capital resources set forth in our Annual Report on Form 10-K along with the information described below.

Cash flows. The following table presents information regarding our cash flows and cash and cash equivalents for the three months ended March 31, 2015 and 2014 (in thousands):

	Three Months Ended March 31,
	2015			2014
Net cash flows provided by operating activities	$	164,022		$	24,820
Net cash flows provided by (used in) investing activities	10,336			(87,911		)
Net cash flows used in financing activities	(23,011		)	(13,912		)
Net change in cash and cash equivalents	151,347			(77,003		)
Cash and cash equivalents, end of period	$	213,545		$	76,224

In the first quarter of 2015, we received approximately $220.3 million related to the 2014 reinstatement of the BTC while the majority of the related payable amounts remained outstanding at quarter end, which led to a significant increase in operating cash flows, offset by a decline in accounts payable and increase in inventories. Our net cash flows provided by investing activity was impacted by the release of restricted cash used to acquire additional interest in Petrotec, the maturities of certain investments in marketable securities along with expenditures made for continued biorefinery capital improvements. Financing activities were impacted by payments made on our term debt and revolver, in addition to our share repurchase program. Our 2014 financing activities included our convertible senior note issuance, our entering into the related capped call transactions as well as equity issuances to support our acquisition activities and for working capital, among others.

Capital expenditures. We have three partially constructed plants, one near New Orleans, Louisiana, one in Emporia, Kansas, one in Clovis, New Mexico and a non-operational plant near Atlanta, Georgia. We expect additional investments of approximately $165 to $180 million in the aggregate, excluding working capital requirements, would be required before these plants would be able to commence production. These facilities would add an expected 150 mmgy to our nameplate production capacity. Our Clovis plant is currently being operated as a terminal facility. We plan to make significant capital expenditures when debt or equity financing becomes available to complete construction of these four facilities.

During recent years, we completed upgrades to a number of our facilities such as Albert Lea, New Boston, Mason City and Newton. We plan to undertake various upgrades at our existing facilities to further expand processing capabilities, which may include an estimated $15 million at our Geismar facility. We may enter into additional tolling arrangements with third parties from time to time where third parties will produce biomass-based diesel on our behalf using our feedstocks. Such arrangements may require investments of additional working capital during the tolling periods.

We continue to be in discussions with lenders in an effort to enter into equity and debt financing arrangements to meet our projected financial needs for facilities under construction and capital improvement projects for our operating facilities. Since these discussions are ongoing, we are uncertain when or if financing will be available. The financing may consist of common or preferred stock, debt, project financing or a combination of these financing techniques. Additional debt would

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increase our leverage and interest costs and would likely be secured by certain of our assets. Additional equity or equity-linked financings would likely have a dilutive effect on our existing and future stockholders. It is likely that the terms of any project financing would include customary financial and other covenants on our project subsidiaries, including restrictions on the ability to make distributions, to guarantee indebtedness and to incur liens on the plants of such subsidiaries.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements affecting the Company, refer to “Note 2 – Summary of Significant Accounting Policies” to our condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objectives of our investment activity are to preserve principal, provide liquidity and maximize income without significantly increasing risk. Some of the securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain a portfolio of cash equivalents in short-term investments in money market funds.

Commodity Price Risk

Over the period from January 2010 through March 31, 2015, average diesel prices based on Platts reported pricing for Group 3 (Midwest) have ranged from a high of approximately $5.40 per gallon reported in June 2011 to a low of approximately $2.74 per gallon in March 2015, with prices averaging $4.15 per gallon during this period. Over the period January 2010 to March 31, 2015, soybean oil prices (based on daily closing nearby futures prices on the CBOT for crude soybean oil) have ranged from a high of $0.5977 per pound, or $4.60 per gallon of biodiesel in April 2011 to a low of $0.2954 per pound, or $2.27 per gallon in January 2015 assuming 7.7 pounds of soybean oil yields one gallon of biodiesel with closing sales prices averaging $0.4576 per pound or $3.52 per gallon. Over the period from January 2010 through March 31, 2015, animal fat prices (based on prices from The Jacobsen Missouri River, for choice white grease) have ranged from a high of $0.5450 per pound in June 2011 to a low of $0.22 per pound in January 2015, with sales prices averaging $0.3683 per pound during this period. Over the period from July 2010 through March 31, 2015, RIN prices (based on prices from OPIS) have ranged from a high of $1.99 in September 2011 to a low of $0.24 in November 2013, with sales prices averaging $0.88 during this period.

Lower biomass-based diesel prices and lower feedstock prices but at a disproportionate decreasing rate as compared to biomass-based diesel prices result in lower profit margins and, therefore, represent unfavorable market conditions. The availability and price of feedstocks are subject to wide fluctuations due to unpredictable factors such as weather conditions during the growing season, rendering volumes, carry-over from the previous crop year and current crop year yield, governmental policies with respect to agriculture and supply and demand.

We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to our sales contracts, lower cost feedstock requirements, soybean oil requirements and the related exchange-traded contracts for 2014. Market risk is estimated as the potential loss in fair value, resulting from a hypothetical 10% adverse change in the fair value of our lower cost feedstock and soybean oil requirements and biomass-based diesel sales. The results of this analysis, which may differ from actual results, are as follows:

	2014 Volume (in millions)	Units	Hypothetical Adverse Change in Price		Annual Gross Profit (in millions)		Percentage Change in Gross Profit
Biodiesel	287.3	gallons	10	%	$	98.3	(60.8	)%
Lower Cost Feedstocks	1,679.7	pounds	10	%	$	56.1	(34.7	)%
Soybean Oil	303.0	pounds	10	%	$	11.6	(7.2	)%

We attempt to protect operating margins by entering into risk management contracts that mitigate price volatility of our feedstocks, such as inedible animal fat and inedible corn oil and energy prices. We create offsetting positions by using a combination of forward physical purchases and sales contracts on feedstock and biomass-based diesel, including risk management futures contracts, swaps and options primarily on heating oil and soybean oil; however, the extent to which we engage in risk management activities varies substantially from time to time, and from feedstock to feedstock, depending on market conditions and other factors. A 10% adverse change in the prices of heating oil would have had a negative effect on the

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fair value of these instruments of $6.7 million. A 10% adverse change in the price of soybean oil would have had a negative effect on the fair value of these instruments of $0.5 million.

Interest Rate Risk

We are subject to interest rate risk in connection with our $0.7 million loan from the proceeds of Variable Rate Demand Industrial Development Revenue Bonds, or IFA Bonds, issued by the Iowa Finance Authority to finance our Ralston facility. The IFA Bonds bear interest at a variable rate determined by the remarketing agent from time to time as the rate necessary to produce a bid for the purchase of all of the Bonds at a price equal to the principal amount thereof plus any accrued interest at the time of determination, but not in excess of 10% per annum. The interest rate on the bonds was 0.08% at March 31, 2015.

REG Newton is subject to interest rate risk relating to its $19.2 million term debt financing from AgStar. Interest will accrue on the outstanding balance of the term loan at 30-day LIBOR plus 400 basis points (effective rate at March 31, 2015 of 4.17%).

We are subject to interest risk relating to the $100.0 million GOZone bonds, which bears interest at variable rates of daily LIBOR. The interest rate on the bonds was 0.02% at March 31, 2015.

We are subject to interest rate risk under our Wells Fargo Revolver entered into on December 23, 2011 under which we had no borrowings or outstanding amounts at March 31, 2015. Amounts borrowed under the Wells Fargo Revolver bear interest, in the case of LIBOR rate loans, at a per annum rate equal to the LIBOR rate plus the LIBOR Rate Margin (as defined in the Wells Fargo Revolver), which may range from 2.50 to 4.00 percent, based on the Quantity Average Excess Availability Amount (as defined in the Wells Fargo Revolver). All other amounts borrowed that are not LIBOR rate loans bear interest at a rate equal to the greatest of (i) (A) 1.75% per annum, (B) the Federal Funds Rate plus 0.5%, (C) the LIBOR Rate (which rate shall be calculated based upon an interest period of three months and will be determined on a daily basis), plus 1.5% points, and (D) the rate of interest announced, from time to time, within Wells Fargo Bank, National Association at its principal office in San Francisco as its “prime rate,” plus (ii) the Base Rate Margin (as defined in the Wells Fargo Revolver), which may range from 1.00 to 1.75 percent, based on the Quantity Average Excess Availability Amount. The Base Rate Margin is subject to reduction or increase depending on the amount available for borrowing under the Wells Fargo Revolver. The loan was a base rate loan as of March 31, 2015 (effective rate at March 31, 2015 of 4.00%).

Our weighted average interest rate on variable rate debt balances for the three months ended March 31, 2015 was 1.15% and a hypothetical increase in interest rate of 10% would not have a material effect on our annual interest expenses and consolidated financial statements.

Investment Exposure

We are exposed to investment risk as it relates to changes in the market value of our investments. Our cash and marketable securities investment policy and strategy attempts primarily to preserve capital and meet liquidity requirements. A large portion of our cash is managed by external managers within the guidelines of our investment policy. We protect and preserve invested funds by limiting default, market, and reinvestment risk. To achieve this objective, we maintain our portfolio of cash and cash equivalents and short-term and long-term investments in a variety of liquid fixed income securities, including both government and corporate obligations and money market funds. As of March 31, 2015 and December 31, 2014, net unrealized gains and losses on these investments were not material.

Inflation

To date, inflation has not significantly affected our operating results, though costs for petroleum-based diesel fuel, feedstocks, construction, labor, taxes, repairs, maintenance and insurance are all subject to inflationary pressures. Inflationary pressure in the future could affect our ability to sell the biomass-based diesel we produce, maintain our production facilities adequately, build new biomass-based diesel production facilities and expand our existing facilities as well as the demand for our facility construction management and operations management services.

ITEM 4. CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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On December 24, 2014, we acquired 69.08% of the outstanding common shares and voting interest of Petrotec. During the three months ended March 31, 2015, we acquired an additional 15.34% ownership of the outstanding common shares and voting interest of Petrotec, bringing the total ownership to 84.42%. Our management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of March 31, 2015, Petrotec's internal control over financial reporting. Petrotec represented less than 5% of our total assets at March 31, 2015 and approximately 13% of our revenues for the three months ended March 31, 2015. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from our scope in the year of acquisition.

Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of March 31, 2015. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2015.

Based on such evaluations, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any material pending legal proceeding, nor is any of our property the subject of any material pending legal proceeding, except ordinary routine litigation arising in the ordinary course of our business and incidental to our business, none of which is expected to have a material adverse impact upon our business, financial position or results of operations.

ITEM 1A. RISK FACTORS

Our business, financial condition, results of operations and liquidity are subject to various risks and uncertainties, including those described below, and as a result, the trading price of our common stock could decline.

Risk Associated With Our Business

Loss or reductions of governmental requirements for the use of biofuels could have a material adverse effect on our revenues and operating margins.

The biomass-based diesel industry relies substantially on federal requirements and state policies for use of biofuels. Since biomass-based diesel has been more expensive to produce than petroleum-based diesel fuel over the past few years, the biomass-based diesel industry depends on governmental programs that support a market for biomass-based diesel that might not otherwise exist.

The most important of these government programs in the United States is RFS2, which requires that a certain volume of biomass-based diesel fuel, which includes biodiesel and renewable hydrocarbon diesel, be consumed. RFS2 became effective on July 1, 2010 and applies through 2022. We believe that much of the increase in demand for our biomass-based diesel since July 2010 is attributable to and accelerated by the implementation of RFS2. In addition, we believe that biomass-based diesel prices since July 2010 benefited significantly from RFS2.

The EPA is required to determine the volume of biomass-based diesel that will be required each year based on the EPA’s consideration of a variety of factors, with a minimum biomass-based diesel annual volume requirement be at least 1 billion gallons . The biomass-based diesel volume requirement for 2013 was 1.28 billion gallons.

There can be no assurance that the United States Congress will not repeal, curtail or otherwise change, or that the EPA will not curtail or otherwise change the RFS2 program in a manner adverse to us. The petroleum industry is generally opposed to RFS2 and can be expected to continue to press for changes that eliminate or reduce its impact. Any repeal or reduction in the RFS2 requirements or reinterpretation of RFS2 resulting in our biomass-based diesel failing to qualify as a required fuel would materially decrease the demand for and price of our biomass-based diesel, which would materially and adversely harm our revenues and cash flows.

If Congress decides to repeal or curtail RFS2, or if the EPA is not able or willing to enforce RFS2 requirements, the demand for our biomass-based diesel based on this program and any increases in demand that we expect due to RFS2 would be significantly reduced or eliminated and our revenues and operating margins would be materially harmed. In addition, although we believe that state requirements for the use of biofuels increase demand for our biomass-based diesel within such states, they generally may not increase overall demand in excess of RFS2 requirements. Rather, existing demand for our biofuel from petroleum refiners and petroleum fuel importers in the 48 contiguous states or Hawaii, which are defined as “Obligated Parties”

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in the RFS2 regulations, in connection with federal requirements, may shift to states that have use requirements or tax incentive programs.

According to EMTS data, 0.31 billion gallons of biomass-based diesel was produced and imported into the U.S. during the first three months of 2015. As of the date of this filing, the EPA has not finalized the 2014 or 2015 Renewable Volume Obligations, or RVOs. The EPA originally proposed a 2014 and 2015 biomass-based diesel RVO of 1.28 billion gallons in each of those years and a reduced Advanced Biofuel RVO of 2.0 to 2.51 billion gallons rather than the original Energy Independence and Security Act of 2009, or EISA, volume of 3.75 billion gallons for 2014. The EPA received significant negative feedback to their proposal number and subsequently issued a "notification in delay in issuing standards." Before the RVO can be finalized, the OMB has to approve EPA’s proposal, based on the same factors outlined above. Due to the delay in publishing the proposal, which the EPA was required to determine and publish by November 30 two years prior, it is possible that the 2014 and 2015 RVOs will be challenged in court which may further delay any final determination of such RVOs, which could reduce the demand for and price of our biomass-based diesel and could harm our revenues and cash flows. In April 2015, the EPA announced in a proposed consent decree to release the 2015 RFS2 target RVO and finalize the 2014 and 2015 targets by November 30, 2015.

Our financial results may be harmed in the event biodiesel production exceeds the RVO.

Notwithstanding the lack of a finalized 2014 RVO, according to EMTS data, RINs representing 1.75 billion gallons of biomass-based diesel were generated for the twelve months ended December 31, 2014. According to EMTS data, 1.78 billion gallons of biomass-based diesel was produced and imported into the U.S. in 2013. Adding the 2012 carry-over to the 2013 RIN generation results in an estimated total biomass-based diesel RIN availability of approximately 2.04 billion gallons, which is approximately 760 million gallons more than required to satisfy the 1.28 billion gallon 2013 biomass-based diesel RVO. The originally proposed 2014 biomass-based diesel RVO of 1.28 billion gallons, would have limited the 2014 carryover to 256 million gallons, or 20%, of 1.28 billion, thus resulting in an excess supply of 504 million gallons of biomass-based diesel RINs. Excess biomass-based diesel RINs may be used to fulfill the advanced biofuel RVO or the renewable fuel RVO. If the volume of excess biomass-based diesel RINs exceeds the volume the Obligated Parties desire to use to fulfill their advanced biofuel and renewable fuel requirements, the demand for and price of our biomass-based and biomass-based diesel RINs may be reduced, which could harm revenues and cash flows.

Our gross margins are dependent on the spread between biomass-based diesel prices and feedstock costs.

Our gross margins depend on the spread between biomass-based diesel prices and feedstock costs. Historically, the spread between biomass-based diesel prices and feedstock costs has varied significantly. Although actual yields vary depending on the feedstock quality, the average monthly spread between the price per gallon of 100% pure biodiesel, or B100, as reported by The Jacobsen Publishing Company, or The Jacobsen, and the price per gallon for the amount of choice white grease, a common inedible animal fat used by us to make biomass-based diesel, was $1.26 in 2012, $1.61 in 2013 and $0.92 in 2014 assuming 8.0 pounds of choice white grease yields one gallon of biomass-based. The average monthly spread for the amount of crude soybean oil required to produce one gallon of biomass-based, based on the nearby futures contract as reported on the Chicago Board of Trade, or CBOT, was $0.65 in 2012, $1.19 in 2013 and $0.58 in 2014 assuming 7.7 pounds of soybean oil yields one gallon of biomass-based. For 2012, 2013 and 2014, approximately 84%, 83% and 85%, respectively, of our total feedstock usage was inedible corn oil, used cooking oil or inedible animal fat and 16%, 17% and 15%, respectively, was virgin vegetable oils.

Biomass-based diesel has traditionally been marketed primarily as an additive or alternative to petroleum-based diesel fuel and as a result biomass-based diesel prices have been influenced by the price of petroleum-based diesel fuel, adjusted for government incentives supporting renewable fuels, rather than biomass-based diesel production costs. Energy prices, particular the market price for crude oil, significantly decreased throughout fourth quarter 2014. A lack of close correlation between production costs and biomass-based diesel prices means that we may be unable to pass increased production costs on to our customers in the form of higher prices. Any decrease in the spread between biomass-based diesel prices and feedstock costs, whether as a result of an increase in feedstock prices or a reduction in biomass-based diesel prices, including, but not limited to, a reduction in the value of RINs would adversely affect our gross margins, cash flow and results of operations.

The costs of raw materials that we use as feedstocks are volatile and our results of operations could fluctuate substantially as a result.

The cost of feedstocks is a significant uncertainty for our business. The success of our operations is dependent on the price of feedstocks and certain other raw materials that we use to produce biomass-based diesel. A decrease in the availability or an increase in the price of feedstocks may have a material adverse effect on our financial condition and operating results. At elevated price levels, these feedstocks may be uneconomical to use, as we may be unable to pass feedstock cost increases on to our customers.

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The price and availability of feedstocks and other raw materials may be influenced by general economic, market and regulatory factors. These factors include weather conditions, farming decisions, government policies and subsidies with respect to agriculture and international trade and global supply and demand. The significance and relative impact of these factors on the price of feedstocks is difficult to predict, especially without knowing what types of feedstock materials will be optimal for use in the future, particularly at new facilities that we may construct or acquire.

The price of our feedstocks can vary significantly based on market conditions. Since January 1, 2008, the cost per pound of choice white grease, an inedible animal fat commonly used by us in the production of biomass-based diesel, has traded in a range of $0.0950 to $0.5250 based on the closing nearby futures prices on the CBOT. If biomass-based diesel production continues to increase in response to RFS2, we expect that more biomass-based diesel producers will seek to use lower cost feedstocks, potentially increasing our costs of production. In addition, because the market for animal fat is less developed than markets for vegetable oils such as soybean oil, we generally are unable to enter into forward contracts at fixed prices.

Inedible corn oil and used cooking oil are not generally available in quantities sufficient to cover all of our operations. If more ethanol plants do not acquire and utilize corn oil extraction equipment, if extraction yields do not improve, if ethanol plants are idled, or ethanol plants begin using the feedstock in their own operations, we may not be able to obtain the volumes of inedible corn oil we desire for use in our production of biomass-based diesel at economical prices and may be forced to utilize higher cost feedstocks to meet increased demand, which may not be economical.

Loss of or reductions in tax incentives for biomass-based diesel production or consumption may have a material adverse effect on industry revenues and operating margins.

The biomass-based diesel industry has historically been substantially aided by federal and state tax incentives. Prior to RFS2, the biomass-based diesel industry relied principally on these tax incentives to bring the price of biomass-based diesel more in line with the price of petroleum-based diesel fuel to the end user. The most significant tax incentive program has been the federal biodiesel mixture excise tax credit, or BTC. The BTC provided a $1.00 refundable tax credit per gallon of pure biomass-based, or B100, to the first blender of biomass-based with petroleum-based diesel fuel. The BTC came into existence on January 1, 2005, had been continuously reinstated until it expired on December 31, 2009 and was reinstated following the lapse in December 2010, retroactively for all of 2010 and prospectively for 2011. The BTC expired again on December 31, 2011 and was again reinstated on January 2, 2013, retroactively for all of 2012 and prospectively for 2013, expired again December 31, 2013 and was again reinstated on December 19, 2014. Unlike prior reinstatement, this last reinstatement was only for one year, retroactive for 2014, rather than two years as has previously been the case. It is generally understood that Congress decided to only enact a one year extenders package, which included the BTC, because Congress wanted to take up tax reform in 2015. There is no assurance that the BTC will be reinstated. Unlike RFS2, the BTC has a direct effect on federal government spending and could be changed or eliminated as a result of changes in the federal budget policy. It is uncertain what action, if any, Congress may take with respect to reinstating the BTC or when such action might be effective. If Congress does not reinstate the credit, demand for our biomass-based diesel and the price we are able to charge for our product may be significantly reduced, harming revenues and profitability. When the BTC expired on December 31, 2011, we experienced an industry-wide acceleration of gallons sold in the fourth quarter of 2011, which was further influenced by the ability of Obligated Parties to satisfy up to 20% of their current RVO with prior year RINs. We believe this increase in production at the end of the year resulted in a buildup of biomass-based diesel inventories and reduced gallons sold in the first quarter of 2012. With the expiration of the BTC at the end of 2013 and 2014, the industry experienced a similar increase in biomass-based diesel production in the fourth quarter of 2013 and 2014, which we believe reduced demand in the first quarter of 2014 and reduced demand on the first quarter of 2015. In response to the regular lapsing and reinstatement of the BTC, the biomass-based diesel industry and its customers have adopted arrangements for sharing the BTC if reinstated.

In addition, several states have enacted tax incentives for the use of biodiesel and/or biomass-based diesel. For example, Illinois offers an exemption from the generally applicable 6.25% sales tax for biodiesel blends that incentivizes blending at 11% biodiesel, or B11. Like the BTC, the Illinois tax incentive program and the tax incentive programs of other state could be changed as a result of state budget considerations or otherwise. Reduction or elimination of such incentives could materially and adversely harm our revenues and profitability.

Risk management transactions could significantly increase our operating costs and working capital requirements and may not be effective.

In an attempt to partially offset the effects of volatile feedstock costs and biomass-based diesel fuel prices, we may enter into contracts that establish market positions in feedstocks, such as inedible corn oil, used cooking oil, inedible animal fats and soybean oil, and related commodities, such as heating oil and ultra-low sulfur diesel, or ULSD. The financial impact of such market positions depends on commodity prices at the time that we are required to perform our obligations under these contracts. Risk management arrangements also expose us to the risk of financial loss in situations where the counterparty defaults on its contract or, in the case of exchange-traded or over-the-counter futures or options contracts, where there is a change in the expected differential between the underlying price in the contract and the actual prices paid or received by us.

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Risk management activities can themselves result in losses when a position is purchased in a declining market or a position is sold in a rising market. Changes in the value of these futures instruments are recognized in current income and may result in margin calls. We may also vary the amount of risk management strategies we undertake, or we may choose not to engage in risk management transactions at all. Our results of operation may be negatively impacted if we are not able to manage our risk management strategy effectively.

One customer accounted for a meaningful percentage of revenues and a loss of this customer could have an adverse impact on our total revenues.

One customer, Pilot Travel Centers LLC, or Pilot, accounted for 18%, 16% and 36% of our revenues in 2014, 2013 and 2012, respectively. Our revenues from Pilot generally do not include the RINs associated with the gallons of biomass-based sold to Pilot. The value of those RINs represented approximately an additional 7% of our total sales, based on the OPIS average RIN price for 2014. In the event we lose Pilot as a customer or Pilot significantly reduces the volume of biomass-based diesel bought from us, it could be difficult to replace the lost revenues from biomass-based diesel and RINs, and our profitability and cash flow could be materially harmed.

Our business is primarily dependent upon two similar products. As a consequence, we may not be able to adapt to changing market conditions or endure any decline in the biomass-based diesel industry.

Our revenues are currently generated almost entirely from the production and sale of biodiesel and renewable hydrocarbon diesel, collectively referred to as biomass-based diesel. Our reliance on biomass-based diesel means that we may not be able to adapt to changing market conditions or to withstand any significant decline in the size or profitability of the biomass-based diesel industry. For example, in 2009 and the beginning of 2010, we were required to periodically idle our plants due to insufficient demand at profitable price points which materially affected our revenues. If we are required to idle our plants in the future or are unable to adapt to changing market conditions, our revenues and results of operations may be materially harmed.

Technological advances and changes in production methods in the biomass-based diesel industry could render our plants obsolete and adversely affect our ability to compete.

It is expected that technological advances in biomass-based diesel production methods will continue to occur and new technologies for biomass-based diesel production may develop. Advances in the process of converting oils and fats into biodiesel and renewable hydrocarbon diesel could allow our competitors to produce biomass-based diesel faster and more efficiently and at a substantially lower cost. If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less competitive or obsolete. Further, it may be necessary for us to make significant expenditures to acquire any new technology and retrofit our plants in order to incorporate new technologies and remain competitive. There is no assurance that third-party licenses for any proprietary technologies that we would need access to in order to remain competitive for either existing processes or new technology will be available to us on commercially reasonable terms or that any new technologies could be incorporated into our plants. In order to execute our strategy to expand into the production of renewable chemicals, additional advanced biofuels, next generation feedstocks and related renewable products, we may need to acquire licenses or other rights to technology from third parties. We can provide no assurance that we will be able to obtain such licenses or rights on favorable terms. If we are unable to obtain, implement or finance new technologies, our production facilities could be less efficient than our competitors, we may not be able to successfully execute our strategy and our results of operations could be substantially harmed.

Our intellectual property is integral to our business. If we are unable to protect our intellectual property, or others assert that our operations violate their intellectual property, our business could be adversely affected.

Our success depends in part upon our ability to protect our intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including patents, copyrights, trademarks and trade secrets in the United States and in selected foreign countries where we believe filing for such protection is advantageous and cost-justified. Our ability to use and prevent others from using our intellectual property is important to our success. Effective patent, copyright, trademark and trade secret protection may be unavailable, limited or not applied for in some countries. Some of our products and technologies are not covered by any patent or patent application.

If we pursue litigation to assert our intellectual property rights, an adverse judicial decision in any of these legal actions could limit our ability to assert our intellectual property rights, limit our ability to develop new products, limit the value of our technology or otherwise negatively impact our business, financial condition and results of operations.  

Any intellectual property rights claim against us, with or without merit, could be time-consuming, expensive to litigate or settle, divert management resources and attention and force us to acquire intellectual property rights and licenses, which may involve substantial royalty payments. Further, a party making such a claim, if successful, could secure a judgment that requires us to pay substantial damages. Any of these events could seriously harm our business, operating results and financial condition.

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If we are unable to respond to changes in ASTM or customer standards, our ability to sell biomass-based diesel may be harmed.

We currently produce biomass-based diesel to conform to or exceed standards established by ASTM. ASTM standards for biomass-based diesel and biomass-based diesel blends may be modified in response to new observations from the industries involved with diesel fuel. New tests or more stringent standards may require us to make additional capital investments in, or modify, plant operations to meet these standards. In addition, some biomass-based customers have developed their own biomass-based standards which are stricter than the ASTM standards. If we are unable to meet new ASTM standards or our biomass-based customers’ standards cost effectively or at all, our production technology may become obsolete, and our ability to sell biomass-based may be harmed, negatively impacting our revenues and profitability.

Increases in our transportation costs or disruptions in our transportation services could have a material adverse effect on our business.

Our business depends on transportation services to deliver our products to our customers and to deliver raw materials to us. The costs of these transportation services are affected by the volatility in fuel prices, such as those caused by recent geopolitical and economic events. For example, in 2012, the market rates of leasing new rail cars nearly doubled as a result of increased demand to move domestically drilled crude oil from new supply fields in the upper Midwest to various refineries. We have not been able in the past, and may not be able in the future, to pass along part or all of any of these increases to customers. If we continue to be unable to increase our prices as a result of increased fuel costs charged to us by transportation providers, our gross margins may be materially adversely affected.

If any transportation providers fail to deliver raw materials to us in a timely manner, we may be unable to manufacture products on a timely basis. Shipments of products and raw materials may be delayed due to weather conditions, strikes or other events. Any failure of a third-party transportation provider to deliver raw materials or products in a timely manner could harm our reputation, negatively affect our customer relationships and have a material adverse effect on our business, financial condition and results of operations.

We are dependent upon our key management personnel and critical talent whereby the loss of any of these persons could adversely affect our results of operations.

We are highly dependent upon key members of our management team along with critical talent possessing unique technical skills for the execution of our business plan. We believe that our future success is highly dependent on the contributions of these key employees. There can be no assurance that any individual will continue in his or her capacity for any particular period of time. The loss of any of these key employees could delay or prevent the achievement of our business objectives and have a material adverse effect upon our results of operations and financial position.

We and certain subsidiaries have indebtedness, which subjects us to potential defaults, could adversely affect our ability to raise additional capital to fund our operations and limits our ability to react to changes in the economy or the biomass-based diesel industry.

At March 31, 2015, our total term debt was $252.7 million. This includes $122.5 million aggregate principal amount of 2.75% convertible senior notes due 2019 that we issued in June 2014, or the Convertible Notes, and $100.0 million of GOZone Bonds for which our newly acquired subsidiary, REG Geismar, is obligated. Our obligation with respect to the GOZone Bonds is secured by the deposit of $101.3 million with the financial institution whose letter of credit supports payments on the bonds. We also have short-term debt obligations under revolving credit agreements provided by certain financial institutions. At March 31, 2015, there was $1.3 million borrowings made under our revolving lines of credit. See "Note 9 - Debt" to our Condensed Consolidated Financial Statements for a description of our indebtedness.

Our indebtedness could:

• require us to dedicate a substantial portion of our cash flow from operations to payments of principal, interest on, and other fees related to such indebtedness, thereby reducing the availability of our cash flow to fund working capital and capital expenditures, and for other general corporate purposes;

• increase our vulnerability to general adverse economic and biomass-based diesel industry conditions;

• limit our flexibility in planning for, or reacting to, changes in our business and the biomass-based diesel industry, which may place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit among other things, our ability to borrow additional funds.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the Convertible Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to satisfy our obligations under our indebtedness and any future indebtedness we may incur and to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional capital on terms that may be onerous or

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highly dilutive. Our ability to refinance the Convertible Notes, the GOZone Bonds, our other existing indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our current or future indebtedness.

We may not have the ability to raise the funds necessary to settle conversions of our Convertible Notes in cash or to repurchase the Convertible Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to repurchase the Convertible Notes.

Holders of the Convertible Notes will have the right to require us to repurchase their Convertible Notes upon the occurrence of a fundamental change at a repurchase price generally equal to 100% of their principal amount, plus accrued and unpaid interest, if any. In addition, upon conversion of the Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Convertible Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the Convertible Notes upon a fundamental change or to settle conversion of the Convertible Notes in cash.

In addition, our ability to repurchase the Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase Convertible Notes at a time when the repurchase is required by the indenture would constitute a default under the indenture governing the Convertible Notes. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes.

Certain provisions in the indenture governing the Convertible Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain provisions in the Convertible Notes and the indenture could make it more difficult or more expensive for a third party to acquire us. For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash. In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover. In either case, and in other cases, our obligations under the notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management.

We are subject to counterparty risk with respect to the capped call transactions.

The counterparties to the capped call transactions are financial institutions, and we will be subject to the risk that they might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If any option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under our transactions with such option counterparty. Our exposure will depend on many factors, but, generally, an increase in our exposure will be correlated to an increase in the market price and volatility of shares of our common stock. In addition, upon a default by any option counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the option counterparties.

We have generated no revenue from sales of renewable chemicals to date and we face significant challenges to developing this business.

We have only recently entered the market for renewable chemicals with our acquisition of LS9, Inc.'s assets in January 2014. To date, we have not generated any revenues from this business which is still at a pre-commercial stage. In order to generate revenue from our renewable chemicals, we must be able to produce sufficient quantities of our products, which we have not done to date.

In entering this market, we intend to sell renewable chemicals as an alternative to chemicals currently in use, and in some cases the chemicals that we seek to replace have been used for many years. The potential customers for our renewable chemical products generally have well developed manufacturing processes and arrangements with suppliers of the chemical components of their products and may resist changing these processes and components. These potential customers frequently impose lengthy and complex product qualification procedures on their suppliers. Factors that these potential customers consider during the product qualification process include consumer preference, manufacturing considerations such as process changes and capital and other costs associated with transitioning to alternative components, supplier operating history, regulatory issues, product liability and other factors, many of which are unknown to, or not well understood by, us. Satisfying these processes may take many months or years. If we are unable to convince these potential customers that our products are comparable to the chemicals that they currently use or that the use of our products produces benefits to them, we will not be successful in these

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markets and our business will be adversely affected. Additionally, in contrast to the tax incentives relating to biofuels, tax credits and subsidies are not currently available in the United States for consumer products or chemical companies who use renewable chemical products. We do not expect meaningful revenue from our sale of renewable chemicals in the near term.

If we fail to expand effectively in international markets, where we have limited operating history, our revenues and our business may be harmed.

Historically, we have generated nearly all of our revenues from the United States. In December 2014, we acquired a 69% interest in Petrotec, which owns two biorefineries in Germany. In March 2015, we acquired additional interest in Petrotec of approximately 15% as a result of a tender offer. There is no assurance that we will be able to acquire additional shares, which could limit our ability to control the operations of Petrotec.

We have no experience operating biorefineries outside of the United States. Our ability to recognize the benefit of our investment in Petrotec, or any other international operations we invest in, will require the attention of management and is subject to a number of risks. Specifically, the biodiesel market in Europe benefits from regulations that encourage the use of biodiesel. As is the case in the United States, these regulations are subject to political and public opinion and may be changed. In addition, expanding our operations internationally subjects us to the following risks:

• recruiting and retaining talented and capable management and employees in foreign countries;

• challenges caused by distance, language and cultural differences;

• protecting and enforcing our intellectual property rights;

• difficulties in the assimilation and retention of employees;

• the inability to extend proprietary rights in our technology into new jurisdictions;

• currency exchange rate fluctuations;

• general economic and political conditions in foreign jurisdictions;

• foreign tax consequences;

• foreign exchange controls or U.S. tax restrictions that might restrict or prevent us from repatriating income earned in countries outside the United States;

• political, economic and social instability;

• higher costs associated with doing business internationally;

• export or import regulations; and trade; and

• tariff restrictions.

These factors and other factors could harm our ability to gain future international revenues. Our failure to successfully manage any international operations and the associated risks effectively could have an adverse effect on our operating results and financial condition.

We might require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop our renewable chemicals business or expand or enhance our biomass-based operations or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financing to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing could involve restrictive covenants, which may restrict our flexibility in operating our business and make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, and our business, operating results, financial condition and prospects could be adversely affected.

We may encounter difficulties in effectively integrating the businesses we acquire.

We may face significant challenges in effectively integrating entities and businesses that we acquire, including our acquisition of substantially all of LS9's assets in January 2014, as well as our acquisition of Syntroleum Corporation and Dynamic Fuels, LLC in June 2014, and our anticipated acquisition of the remaining ownership of Petrotec and we may not realize the benefits anticipated from such acquisitions.  Achieving the anticipated benefits of our acquired businesses will depend in part upon whether we can integrate our businesses in an efficient and effective manner.  Our integration of acquired businesses involves a number of risks, including:

• difficulty in integrating the operations and personnel of the acquired company;

• difficulty in effectively integrating the acquired technologies, products or services with our current technologies, products or services;

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• demands on management related to the increase in our size after the acquisition;

• the diversion of management’s attention from daily operations to the integration of acquired businesses and personnel;

• failure to achieve expected synergies and costs savings;

• difficulties in the assimilation and retention of employees;

• difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations;

• difficulties in the integration of departments, systems, including accounting systems, technologies, books and records and procedures, as well as in maintaining uniform standards and controls, including internal control over financial reporting, and related procedures and policies;

• incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;

• the need to fund significant working capital requirements of any acquired production facilities;

• potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company or technology, including but not limited to, issues with the acquired company’s intellectual property, product quality, environmental liabilities, data back-up and security, revenue recognition or other accounting practices, employee, customer or partner issues or legal and financial contingencies;

• exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or other third parties; and

• incurring significant exit charges if products or services acquired in business combinations are unsuccessful.

We may not successfully identify and complete acquisitions and other strategic relationships on favorable terms in order to execute our strategy to grow and diversify our business.

We regularly review domestic and international acquisitions of biofuel production facilities and have acquired most of our facilities from third parties. However, we may be unable to identify suitable acquisition candidates in the future. Even if we identify appropriate acquisition candidates, we may be unable to complete such acquisitions on favorable terms, if at all. If we are unable to successfully acquire other businesses or facilities, we may not be able to grow our business as planned.

We may require additional capital to fund future acquisitions. If we are unable to obtain such capital on satisfactory terms, or if such capital is otherwise unavailable, we may be unable to complete such acquisitions and our business may be harmed.

We may not realize the benefit of our investment in the renewable chemicals market.

We have only recently expanded our business into the production of renewable chemicals from biomass feedstocks through the acquisition of certain assets. The renewable chemicals market is underdeveloped. Any chemicals that we produce from renewable sources may not prove to be as effective as chemicals produced from conventional sources and, regardless of their effectiveness, renewable chemicals may not be accepted in the chemical marketplace. If this were to occur, we would not realize the benefit of our investment in renewable chemicals and our results of operations could be harmed.

We have three partially constructed plants, one non-operational plant, and planned upgrades to our operating plants, each of which would require capital that we may not be able to raise and that may result in an impairment that could negatively impact our financial position, results of operations and future cash flows.

We have three partially constructed plants, one near New Orleans, Louisiana, one in Emporia, Kansas and one in Clovis, New Mexico and one non-operational plant near Atlanta, Georgia. We may choose to invest approximately $165 to $180 million in the aggregate, excluding working capital requirements, before these four plants would be able to commence production. Our Clovis plant is currently being operated as a terminal facility. In order to complete construction on these facilities as planned, we will require additional capital. In November 2012, we acquired the above mentioned biomass-based facility near Atlanta, Georgia, which had been idled prior to our acquisition and will remain so until certain repairs or upgrades are made. While we intend to finance certain upgrades to our existing facilities from our cash flow from operations, we will need to raise significant capital to complete construction of the three partially constructed or non-operational facilities and to fund related working capital requirements. It is uncertain when or if financing will be available. It is also likely that the terms of any project financing would include customary financial and other covenants restricting our project subsidiaries, including restrictions on the ability to make distributions, to guarantee indebtedness and to incur liens on the plants of such subsidiaries.

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Our business is subject to seasonal fluctuations, which are likely to cause our revenues and operating results to fluctuate.

Our operating results are influenced by seasonal fluctuations in the price of and demand for biodiesel. Our sales tend to decrease during the winter season due to perceptions that biodiesel will not perform adequately in colder weather. Colder seasonal temperatures can cause the higher cloud point biodiesel we make from inedible animal fats to become cloudy and eventually gel at a higher temperature than petroleum-based diesel or lower cloud point biodiesel made from soybean, canola, used cooking oil or inedible corn oil. Such gelling can lead to plugged fuel filters and other fuel handling and performance problems for customers and suppliers. Reduced demand in the winter for our higher cloud point biodiesel may result in excess supply of such higher cloud point biodiesel and lower prices for such higher cloud point biodiesel. In addition, most of our production facilities are located in colder Midwestern states and our costs of shipping biodiesel to warmer climates generally increase in cold weather months.

In addition, our RINs also have an element of seasonality to them. Since only 20% of an Obligated Party’s annual RVO can be satisfied by prior year RINs, most RINs must come from biofuel produced or imported during the RVO year. As a result, one would expect RIN prices to decrease as the calendar year progresses if the RIN market is oversupplied compared to that year’s RVO and increase if it is undersupplied. For example, in 2012, which had a RVO for biomass-based diesel of one billion gallons, biomass-based diesel RIN prices, as reported by OPIS, began to decrease in September when biomass-based diesel RIN generation neared the equivalent of 900 million gallons, as reported by EMTS. Similarly, in September of 2013 when biomass-based diesel RIN generation reached approximately 960 million gallons compared to a 2013 RVO of 1.28 billion gallons, biomass-based diesel RIN prices, as reported by OPIS, began to decline. As a result of these seasonal fluctuations, comparisons of operating measures between consecutive quarters may not be as meaningful as comparisons between longer reporting periods.

Failure to comply with governmental regulations, including EPA requirements relating to RFS2, could result in the imposition of penalties, fines, or restrictions on our operations and remedial liabilities.

The biomass-based diesel industry is subject to extensive federal, state and local laws and regulations related to the general population’s health and safety and compliance and permitting obligations, including those related to the use, storage, handling, discharge, emission and disposal of municipal solid waste and other waste, pollutants or hazardous substances, discharges, air and other emissions, as well as land use and development. Existing laws also impose obligations to clean up contaminated properties or to pay for the cost of such remediation, often upon parties that did not actually cause the contamination. Compliance with these laws, regulations and obligations could require substantial capital expenditures. Failure to comply could result in the imposition of penalties, fines or restrictions on operations and remedial liabilities. These costs and liabilities could adversely affect our operations.

Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our business in general and on our results of operations, competitive position or financial condition. We are unable to predict the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would significantly increase our cost of doing business or affect our operations in any area.

Under certain environmental laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination regardless of whether we were responsible for the release or contamination, or if current or prior operations were conducted consistent with accepted standards of practice. Such liabilities can be significant and, if imposed, could have a material adverse effect on our financial condition or results of operations.

In addition to the regulations mentioned above, we are subject to various laws and regulations related to RFS2, most significantly regulations related to the generation and dissemination of RINs. These regulations are highly complex and evolving, requiring us to periodically update our compliance systems. For example, in 2008, we unintentionally generated duplicate RINs as a result of a change to the software we use to manage RIN generation. We voluntarily reported this violation to the EPA and followed EPA guidance in correcting the issue promptly. In 2011, we entered into an administrative settlement agreement with the EPA regarding this violation and paid a fine for this inadvertent violation. Any violation of these regulations by us, inadvertently or otherwise, could result in significant fines and harm our customers’ confidence in the RINs we issue, either of which could have a material adverse effect on our business. For a detailed description of RINs, see “Business-Government Programs Favoring Biodiesel Production and Use-Renewable Identification Numbers.”

In response to certain cases of RIN fraud whereby biomass-based producers were selling biomass-based diesel RINs without having produced the required renewable fuel, the EPA is in the process of implementing a quality assurance program for RIN compliance. Compliance with these or any new regulations or Obligated Party verification procedures could require significant expenditures to attain and maintain compliance. Failure to comply could result in the imposition of penalties, fines, restrictions on operations, loss of customers and remedial liabilities. These costs and liabilities may have a material adverse

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effect on our business in general and on our results of operations, competitive position or financial condition. We are unable to predict the effect of any additional regulatory or customer requirements which may be adopted in the future, including whether any such regulations or verification procedures would significantly increase our cost of doing business or affect our operations in any area.

Our business may suffer if we are unable to attract or retain talented personnel.

Our success depends on the abilities, expertise, judgment, discretion, integrity and good faith of our management and employees to manage the business and respond to economic, market and other conditions. We have a relatively small management team and employee base, and the inability to attract suitably qualified replacements or additional staff could adversely affect our business. No assurance can be given that our management team or employee base will continue their employment, or that replacement personnel with comparable skills could be found. If we are unable to attract and retain key personnel and additional employees, our business may be adversely affected.

If we fail to maintain effective internal control over financial reporting, we might not be able to report our financial results accurately or prevent fraud. In that case, our stockholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the value of our stock.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. The process of maintaining our internal controls may be expensive and time consuming and may require significant attention from management. Although we have concluded as of March 31, 2015 that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm discover a material weakness, the disclosure of that fact could harm the value of our stock and our business.

A natural disaster, leak, fire or explosion at any of our production plants or customer’s facilities could increase our costs and liabilities.

Because biomass-based diesel and some of its inputs and outputs are combustible and/or flammable, a leak, fire or explosion may occur at a plant or customer’s facility which could result in damage to the plant and nearby properties, injury to employees and others, and interruption of operations. For example, in April 2015, we experienced a fire at our Geismar facility and two employees were injured. Our Geismar facility has been shut down since the fire and we expect will remain so while repairs are made for at least another three months. We may experience delays beyond our control in repairing the facility. While we expect a significant portion of the repair costs associated with the Geismar fire will be covered by insurance, our insurance company may dispute coverage. In addition, there can be no assurance that our customers at the Geismar facility will return once production begins again.

A majority of our facilities are also located in the Midwest, which is subject to tornado activity. Furthermore, REG Life Sciences' research and development center is in South San Francisco, California, which is subject to earthquakes. In addition, our Houston and Geismar facilities, due to their Gulf Coast location, are vulnerable to hurricanes, which may cause plant damage, injury to employees and others and interruption of operations and all of our plants could incur damage from other natural disasters. If any of the foregoing events occur, we may incur significant additional costs including, among other things, loss of profits due to unplanned temporary or permanent shutdowns of our facilities, clean-up costs, liability for damages or injuries, legal expenses and reconstruction expenses, which would seriously harm our results of operations and financial condition.

Our insurance may not protect us against our business and operating risks.

We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. For some risks, we may not obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance policies may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Although we intend to maintain insurance at levels we believe are appropriate for our business and consistent with industry practice, we will not be fully insured against all risks. In addition, pollution, environmental risks and the risk of natural disasters generally are not fully insurable. Losses and liabilities from uninsured and underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition and results of operations.

Confidentiality agreements with employees and others may not adequately prevent disclosures of confidential information, trade secrets and other proprietary information.

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We rely in part on trade secret protection to protect our confidential and proprietary information and processes. However, trade secrets are difficult to protect. We have taken measures to protect our trade secrets and proprietary information, but these measures may not be effective. For example, we require new employees and consultants to execute confidentiality agreements upon the commencement of their employment or consulting arrangement with us. These agreements generally require that all confidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties. These agreements also generally provide that knowhow and inventions conceived by the individual in the course of rendering services to us are our exclusive property. Nevertheless, these agreements may be breached, or may not be enforceable, and our proprietary information may be disclosed. Further, despite the existence of these agreements, third parties may independently develop substantially equivalent proprietary information and techniques. Accordingly, it may be difficult for us to protect our trade secrets. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Moreover, we cannot assure you that our technology does not infringe upon any valid claims of patents that other parties own. In the future, if we are found to be infringing on a patent owned by a third party, we might have to seek a license from such third party to use the patented technology. We cannot assure you that, if required, we would be able to obtain such a license on terms acceptable to us, if at all. If a third party brought a legal action against us or our licensors, we could incur substantial costs in defending ourselves, and we cannot assure you that such an action would be resolved in our favor. If such a dispute were to be resolved against us, we could be subject to significant damages.

We are a holding company and there are limitations on our ability to receive dividends and distributions from our subsidiaries.

All of our principal assets, including our biomass-based diesel production facilities, are owned by subsidiaries and some of these subsidiaries are subject to loan covenants that generally restrict them from paying dividends, making distributions or making loans to us or to any other subsidiary. These limitations will restrict our ability to repay indebtedness, finance capital projects or pay dividends to stockholders from our subsidiaries’ cash flows from operations.

Risks Related to the Biomass-based diesel Industry

The market price of biomass-based diesel is influenced by the price of petroleum-based distillate fuels, such as ultra-low sulfur diesel, and decreases in the price of petroleum-based distillate fuels or RIN values would very likely decrease the price we can charge for our biomass-based diesel, which could harm our revenues and profitability.

Historically, biodiesel prices have been strongly correlated to petroleum-based diesel prices and in particular ULSD, regardless of the cost of producing biomass-based diesel itself. We market our biofuel as an alternative to petroleum-based fuels. Therefore, if the price of petroleum-based diesel falls, the price of biomass-based diesel could decline, and we may be unable to produce products that are an economically viable alternative to petroleum-based fuels. Petroleum prices are volatile due to global factors, such as the impact of wars, political uprisings, new extraction technologies and techniques, OPEC production quotas, worldwide economic conditions, changes in refining capacity and natural disasters. Additionally, demand for liquid transportation fuels, including biomass-based diesel, is impacted by economic conditions.

Just as a small reduction in the real or anticipated supply of crude oil can have a significant upward impact on the price of petroleum-based fuels, a perceived reduction of such threats can result in a significant reduction in petroleum-based fuel prices. A reduction in petroleum-based fuel prices may have a material adverse effect on our revenues and profits if such price decrease reduces the price we are able to charge for our biomass-based diesel.

There was a significant decline in RIN prices during the second and third quarters of 2014, but the price went back up in the fourth quarter and finished the year at its peak at $0.77 per RIN, as reported by OPIS. In 2013, RIN prices decreased sharply from $1.09 per RIN on July 1, 2013 to $0.35 per RIN at December 31, 2013. A reduction in RIN values, such as those experienced in 2013 and remaining low throughout the majority of 2014, may have a material adverse effect on our revenues and profits as such price decrease reduce the price we are able to charge for our biomass-based diesel.

We operate in a highly competitive industry and competition in our industry would increase if new participants enter the biomass-based diesel business.

We operate in a very competitive environment. The biomass-based diesel industry is primarily comprised of smaller entities that engage exclusively in biodiesel production, large integrated agribusiness companies that produce biodiesel along with their soybean crush businesses and increasingly, integrated petroleum companies. We face competition for capital, labor, feedstocks and other resources from these companies. In the United States, we compete with soybean processors and refiners, including Archer-Daniels-Midland Company, Cargill, and Louis Dreyfus Commodities. In addition, petroleum refiners are

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increasingly entering into biomass-based diesel production, which includes Neste Oil with approximately 600 million gallons of global renewable hydrocarbon diesel production capacity in Asia and Europe and Valero Energy Corporation with its Diamond Green joint venture renewable hydrocarbon diesel plant. These and other competitors that are divisions of larger enterprises may have greater financial resources than we do. We also have many smaller competitors. If our competitors consolidate or otherwise grow and we are unable to similarly increase our scale, our business and prospects may be significantly and adversely affected.

In addition, petroleum companies and diesel retailers form the primary distribution networks for marketing biomass-based diesel through blended petroleum-based diesel. If these companies increase their direct or indirect biomass-based diesel production, there will be less need to purchase biomass-based diesel from independent biomass-based diesel producers like us. Such a shift in the market would materially harm our operations, cash flows and financial position.

The development of alternative fuels and energy sources may reduce the demand for biodiesel, resulting in a reduction in our revenues and profitability.

The development of alternative fuels, including a variety of energy alternatives to biodiesel has attracted significant attention and investment. Neste Oil operates four renewable hydrocarbon diesel plants: a 240 million gallon per year plant in Singapore, a 240 million gallon per year plant in Rotterdam, Netherlands, and two 60 million gallon per year plants in Porvoo, Finland. In the United States, Diamond Green Diesel, LLC operates a 137 million gallon per year renewable hydrocarbon diesel plant in Norco, Louisiana in 2013. Under RFS2, renewable hydrocarbon diesel made from biomass meets the definition of biomass-based diesel and thus is eligible, along with biodiesel, to satisfy the RFS2 biomass-based diesel requirement described in “Business-Government Programs Favoring Biodiesel Production and Use.” Furthermore, under RFS2, renewable hydrocarbon diesel may receive up to 1.7 RINs per gallon, whereas biodiesel currently receives 1.5 RINs per gallon. As the value of RINs increases, this 0.2 RIN advantage may make renewable hydrocarbon diesel more cost-effective, both as a petroleum-based diesel substitute and for meeting RFS2 requirements. If renewable hydrocarbon diesel proves to be more cost-effective than biodiesel, revenues from our biodiesel plants and our results of operations would be adversely impacted.

In addition, the EPA may allow other fuels to satisfy the RFS2 requirements and allow RINs to be generated upon the production of these fuels. The EPA recently adopted regulations to amend the definition of “Home Heating Oil” under RFS2, which expands the scope of fuels eligible to generate RINs.

The biomass-based diesel industry will also face increased competition resulting from the advancement of technology by automotive, industrial and power generation manufacturers which are developing more efficient engines, hybrid engines and alternative clean power systems. Improved engines and alternative clean power systems offer a technological solution to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. If and when these clean power systems are able to offer significant efficiency and environmental benefits and become widely available, the biomass-based diesel industry may not be able to compete effectively with these technologies and government requirements for the use of biofuels may not continue.

The development of alternative fuels and renewable chemicals also puts pressure on feedstock supply and availability to the biomass-based diesel industry. If these emerging technologies compete with biomass-based diesel for feedstocks, are more profitable or have greater governmental support than biomass-based diesel does, then the biomass-based diesel industry may have difficulty in procuring the feedstocks necessary to be successful.

Increased industry-wide production of biomass-based diesel could have a negative effect on our margins and there remains excess production capacity in the biomass-based diesel industry.

According to the National Biodiesel Board, or NBB, as of September 12, 2012, 2.7 billion gallons per year of biodiesel production capacity in the United States was registered under the RFS2 program by NBB members. In addition to this amount, several hundred more gallons of U.S. based biomass-based diesel production capacity was registered by non-NBB members and another 1.2 billion gallons of biomass-based diesel production was registered by foreign producers. Furthermore, plants under construction and expansion in the United States as of December 31 2011, if completed, could add an additional several hundred million gallons of annual biodiesel production capacity. The annual production capacity of existing plants and plants under construction far exceeds both historic consumption of biomass-based diesel in the United States and required consumption under RFS2. If this excess production capacity was fully utilized for the U.S. market, it would increase competition for our feedstocks, increase the volume of biomass-based diesel on the market and may reduce biomass-based diesel gross margins, harming our revenues and profitability.

The European Commission has imposed anti-dumping and countervailing duties on biodiesel blends imported into Europe, which have effectively eliminated our ability to sell those biodiesel blends in Europe.

In March 2009, as a response to the BTC, the European Commission imposed anti-dumping and anti-subsidy tariffs on biodiesel produced in the United States. These tariffs have effectively eliminated European demand for 20% biodiesel blends, or B20, or higher imported from the United States. The European Commission has extended these tariffs through 2014. In May

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2011, the European Commission imposed similar anti-dumping and countervailing duties on biodiesel blends below B20. These duties significantly increase the price at which we and other United States biodiesel producers will be able to sell such biodiesel blends in European markets, making it difficult or impossible to compete in the European biodiesel market. These anti-dumping and countervailing duties therefore decrease the demand for biodiesel produced in the United States and increase the supply of biodiesel available in the United States market. Such market dynamics may negatively impact our revenues and profitability.

If automobile manufacturers and other industry groups express reservations regarding the use of biodiesel, our ability to sell biodiesel will be negatively impacted.

Because it is a relatively new product compared with petroleum diesel, research on biodiesel use in automobiles is ongoing. While most heavy duty automobile manufacturers have approved blends of up to 20% biodiesel, some industry groups have recommended that blends of no more than 5% biodiesel be used for automobile fuel due to concerns about fuel quality, engine performance problems and possible detrimental effects of biodiesel on rubber components and other engine parts. Although some manufacturers have encouraged use of biodiesel fuel in their vehicles, cautionary pronouncements by other manufacturers or industry groups may impact our ability to market our biodiesel.

Perception about “food vs. fuel” could impact public policy which could impair our ability to operate at a profit and substantially harm our revenues and operating margins.

Some people believe that biomass-based diesel may increase the cost of food, as some feedstocks such as soybean oil used to make biomass-based diesel can also be used for food products. This debate is often referred to as “food vs. fuel.” This is a concern to the biomass-based diesel industry because biomass-based diesel demand is heavily influenced by government policy and if public opinion were to erode, it is possible that these policies would lose political support. These views could also negatively impact public perception of biomass-based diesel. Such claims have led some, including members of Congress, to urge the modification of current government policies which affect the production and sale of biofuels in the United States.

Concerns regarding the environmental impact of biomass-based diesel production could affect public policy which could impair our ability to operate at a profit and substantially harm our revenues and operating margins.

Under the EISA, the EPA is required to produce a study every three years of the environmental impacts associated with current and future biofuel production and use, including effects on air and water quality, soil quality and conservation, water availability, energy recovery from secondary materials, ecosystem health and biodiversity, invasive species and international impacts. The first such triennial report was released in February 2012. The 2012 report concludes that (1) the extent of negative impacts to date are limited in magnitude and are primarily associated with the intensification of corn production; (2) whether future impacts are positive or negative will be determined by the choice of feedstock, land use change, cultivation and conservation practices; and (3) realizing potential benefits will require implementation and monitoring of conservation and best management practices, improvements in production efficiency, and implementation of innovative technologies at commercial scales. Should future EPA triennial studies, or other analyses find that biofuel production and use has resulted in, or could in the future result in, adverse environmental impacts, such findings could also negatively impact public perception of biofuel and acceptance of biofuel as an alternative fuel, which also could result in the loss of political support.

To the extent that state or federal laws are modified or public perception turns against biomass-based diesel, use requirements such as RFS2 and state tax incentives may not continue, which could materially harm our ability to operate profitably.

Problems with product performance, in cold weather or otherwise, could cause consumers to lose confidence in the reliability of biodiesel which, in turn, would have an adverse impact on our ability to successfully market and sell biodiesel.

Concerns about the performance of biodiesel could result in a decrease in customers and revenues and an unexpected increase in expenses. Biodiesel typically has a higher cloud point than petroleum-based diesel. The cloud point is the temperature below which a fuel exhibits a noticeable cloudiness and is the conventional indicator of a fuel’s potential for cold weather problems. The lower the cloud point, the better the fuel should perform in cold weather. According to an article published by Iowa State University Extension, the cloud point of biodiesel is typically between 30 °F and 60 °F, while the cloud point of the most common form of pure petroleum-based diesel fuel is typically less than 20 °F. It is our experience that when biodiesel is mixed with pure petroleum-based diesel to make a two percent biodiesel blend, the cloud point of the blended fuel can be 2 °F to 6 °F higher than petroleum-based diesel and the cloud point of a twenty percent biodiesel blend can be 15 °F to 35 °F higher than petroleum based diesel, depending on the individual cloud points of the biodiesel and petroleum-based diesel. Cold temperatures can therefore cause biodiesel blended fuel to become cloudy and eventually to gel when pure petroleum-based diesel would not, and this can lead to plugged fuel filters and other fuel handling and performance problems for customers and suppliers. The consequences of these higher cloud points may cause demand for biodiesel in northern and

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eastern United States markets to diminish during the colder months, which are the primary markets in which we currently operate.

The tendency of biodiesel to gel in colder weather may also result in long-term storage problems. In cold climates, fuel may need to be stored in a heated building or heated storage tanks, which result in higher storage costs. This and other performance problems, including the possibility of particulate formation above the cloud point of a blend of biodiesel and petroleum-based diesel, may also result in increased expenses as we try to remedy these performance problems, including the costs of extra cold weather treatment additives. Remedying these performance problems may result in decreased yields, lower process throughput or both, as well as substantial capital costs. Any reduction in the demand for our biodiesel product, or the production capacity of our facilities will reduce our revenues and have an adverse effect on our cash flows and results of operations.

Growth in the sale and distribution of biomass-based diesel is dependent on the expansion of related infrastructure which may not occur on a timely basis, if at all, and our operations could be adversely affected by infrastructure limitations or disruptions.

Growth in the biomass-based diesel industry depends on substantial development of infrastructure for the distribution of biodiesel. Substantial investment required for these infrastructure changes and expansions may not be made on a timely basis or at all. The scope and timing of any infrastructure expansion are generally beyond our control. Also, we compete with other biofuel companies for access to some of the key infrastructure components such as pipeline and terminal capacity. As a result, increased production of biomass-based diesel will increase the demand and competition for necessary infrastructure. Any delay or failure in expanding distribution infrastructure could hurt the demand for or prices of biomass-based diesel, impede delivery of our biomass-based diesel, and impose additional costs, each of which would have a material adverse effect on our results of operations and financial condition. Our business will be dependent on the continuing availability of infrastructure for the distribution of increasing volumes of biomass-based diesel and any infrastructure disruptions could materially harm our business.

We face competition from imported biodiesel and renewable hydrocarbon diesel, which may reduce demand for biomass-based diesel produced by us and cause our revenues and profits to decline.

Biodiesel and renewable hydrocarbon diesel imports into the United States have increased significantly and compete with United States produced biodiesel. The imported fuels may benefit from production incentives or other financial incentives in their home countries that offset some of their production costs and enable them to profitably sell biodiesel or renewable hydrocarbon diesel in the United States at lower prices than United States-based biodiesel producers. Under RFS2, imported biodiesel and renewable hydrocarbon diesel is eligible and, therefore, competes to meet the volumetric requirements for biomass-based diesel and advanced biofuels. If imports continue to increase, this could make it more challenging for us to market or sell biomass-based diesel in the United States, which would have a material adverse effect on our revenues. In January 2015, the EPA announced the approval for Argentinian biodiesel made from soybean oil to earn RINs. Imported biomass-based diesel that does not qualify under RFS2, also competes in jurisdictions where there are biomass-based diesel blending requirements.

Nitrogen oxide emissions from biodiesel may harm its appeal as a renewable fuel and increase costs.

In some instances, biodiesel may increase emissions of nitrogen oxide as compared to petroleum-based diesel fuel, which could harm air quality. Nitrogen oxide is a contributor to ozone and smog. New Technology Diesel Engines eliminate any such increase. Emissions from older vehicles while the fleet turns over may decrease the appeal of biodiesel to environmental groups and agencies who have been historic supporters of the biodiesel industry, potentially harming our ability to market our biodiesel.

In addition, several states may act to regulate potential nitrogen oxide emissions from biodiesel. California recently adopted regulations that may limit the volume of biodiesel that can be used or require an additive to reduce potential emissions. In states where such an additive is required to sell biodiesel, the additional cost of the additive may make biodiesel less profitable or make biodiesel less cost competitive against petroleum-based diesel or renewable hydrocarbon diesel, which would negatively impact our ability to sell our products in such states and therefore have an adverse effect on our revenues and profitability.

Several biofuels companies throughout the United States have filed for bankruptcy over the last several years due to industry and economic conditions.

A volatile regulatory environment, lack of debt or equity investments and volatile biofuel prices and feedstock costs have likely contributed to the necessity of bankruptcy filings by biofuel producers. Our business has been, and in the future may be, negatively impacted by the industry conditions that influenced the bankruptcy proceedings of other biofuel producers, or we may encounter new competition from buyers of distressed biodiesel properties who enter the industry at a lower cost than original plant investors.

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Risks Related to Our Common Stock

The market price for our common stock may be volatile.

Although there is currently an active and liquid trading market for our common stock, the market price for our common stock is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:

• actual or anticipated fluctuations in our financial condition and operating results;

• changes in the performance or market valuations of other companies engaged in our industry;

• issuance of new or updated research reports by securities or industry analysts;

• changes in financial estimates by us or of securities or industry analysts;

• investors’ general perception of us and the industry in which we operate;

• changes in the political climate in the industry in which we operate, existing laws, regulations and policies applicable to our business and products, including RFS2, and the continuation or adoption or failure to continue or adopt renewable energy requirements and incentives, including the BTC;

• other regulatory developments in our industry affecting us, our customers or our competitors;

• announcements of technological innovations by us or our competitors;

• announcement or expectation of additional financing efforts, including sales or expected sales of additional common stock;

• additions or departures of key management or other personnel;

• litigation;

• inadequate trading volume;

• general market conditions in our industry; and

• general economic and market conditions, including continued dislocations and downward pressure in the capital markets.

In addition, stock markets generally and from time to time experience significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may have material adverse effect on the market price of our common stock.

We may issue additional common stock as consideration for future investments or acquisitions.

We have issued in the past, and may issue in the future, our securities in connection with investments and acquisitions. The amount of our common stock or securities convertible into or exchangeable for our common stock issued in connection with an investment or acquisition could constitute a material portion of our then outstanding common stock.

We have never paid dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future.

We have paid no cash dividends on any of our classes of common stock to date, have contractual restrictions against paying cash dividends and currently intend to retain our future earnings to fund the development and growth of our business. As a result, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur. Investors seeking cash dividends should not invest in our common stock.

Delaware law and our amended and restated certificate of incorporation and bylaws will contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

Provisions in our amended and restated certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:

• the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;

• the requirement for advance notice for nominations for election to the board of directors or for proposing matters that can be acted upon at a stockholders’ meeting;

• the ability of the board of directors to alter our bylaws without obtaining stockholder approval;

• the ability of the board of directors to issue, without stockholder approval, up to 10,000,000 shares of preferred stock with rights set by the board of directors, which rights could be senior to those of common stock;

• a classified board;

• the required approval of holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or amend or repeal the provisions of our amended and restated certificate of

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incorporation regarding the classified board, the election and removal of directors and the ability of stockholders to take action by written consent; and

• the elimination of the right of stockholders to call a special meeting of stockholders and to take action by written consent.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL. These provisions may prohibit or restrict large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us. These provisions in our amended and restated certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors might be willing to pay for shares of our common stock in the future and result in our market price being lower than it would without these provisions.

If securities or industry analysts issue an adverse or misleading opinion regarding our stock or do not publish research or reports about our business, our stock price and trading volume could decline.

The trading market for our common stock relies in part on the research and reports that equity research analysts publish about us and our business. It is difficult for companies such as ours to attract independent equity research analysts to cover our common stock. We do not control these analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our common stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business. Although there is currently an active and liquid trading market for REG common stock, if one or more equity research analysts ceases coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline and the market for our common stock to become illiquid.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 19, 2015, the Board of Directors approved a stock repurchase program authorizing up to $30.0 million in repurchases. At March 31, 2015, $25.0 million remained available for future stock repurchases under this repurchase program. During the quarter ended March 31, 2015, we repurchased 525,281 shares of our Common Stock under this program

Period	Total Number of Shares Purchased	Average Price per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Dollar Value of Shares that May Yet Be Purchased
February 2015	None	N/A		None	$	30,000,000
March 2015	525,281	$	9.49	525,281	$	25,000,000

On February 27, 2015, we issued 37,966 shares of common stock with respect to the intangible supply agreement in connection with the purchase of substantially all Tellurian Biodiesel, Inc. and American BDF, LLC assets.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(A) Exhibits:

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Exhibit No.	Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
32.1*	Certification of the Chief Executive Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of the Chief Financial Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		RENEWABLE ENERGY GROUP, INC.
Dated:	May 7, 2015	By:	/s/ Daniel J. Oh
			Daniel J. Oh
			Chief Executive Officer (Principal Executive Officer)
Dated:	May 7, 2015	By:	/s/ Chad Stone
			Chad Stone
			Chief Financial Officer (Principal Financial Officer)
Dated:	May 7, 2015	By:	/s/ Chad A. Baker
			Chad A. Baker
			Controller and Chief Accounting Officer (Principal Accounting Officer)

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